Philippines Aims for No. 2 Geothermal Spot with $12.6B Investment Drive

MANILA, Philippines —The Philippines needs to attract about $12.6 billion in investments to build 2,100 MW of capacity as it seeks to reclaim its spot as the world’s No. 2 geothermal producer. Speaking to reporters on Thursday, Department of Energy (DOE) Secretary Sharon Garin said it takes $6 million to produce one megawatt of geothermal energy. “It’s quite expensive,” she said on the sidelines of the 7th Philippine International Geothermal Conference in Batangas. Industry players earlier said the exploration and drilling stage is the riskiest part of the business, as they need to prepare about $10 million to $12 million per well, even without the certainty of securing a commercial resource. To help developers cut the risks of exploring geothermal sources in the country, the government is eyeing an additional P60 billion injection into the geothermal derisking facility. Garin said the agency is ready to facilitate fresh talks with financial institutions, such as the Asian Development Bank (ADB) and Land Bank of the Philippines, to bring in additional capital for the Philippine geothermal resource derisking facility (PGRDF). Currently, the facility has about P10.7 billion ready for rollout. “If it’s successful and it’s well managed, we can. And we do intend to do that,” Garin said when asked about applying for a new facility. “But I think if it’s successful, I think more, even not just ADB will offer,” she added. The idea of the PGRDF is that the government would shoulder half of the drilling costs, with the loan tagged as a grant if the exploration activity is unsuccessful. “But I think if we do it properly, and most of these are successful, we won’t have a problem accessing other funds… We have to choose the right projects for this undertaking,” she said. Without disclosing more details, Garin said the facility has identified 12 projects that could benefit from the initial round of the budget. In a separate interview, Marvin Kenneth Bailon, head of business development at Energy Development Corp., stated that the group has included its project in Mindanao on the list. Currently, the country has 2,057 MW of installed geothermal capacity, making it the third-largest geothermal producer globally. Geothermal power accounted for about 6.4 percent of electricity generation last year, with Garin hoping to increase this to 10 percent. Garin described geothermal as the “best resource” because the technology can produce electricity around the clock. /pai