17 Power Firms Vie for P10 Billion Geothermal Funding

MANILA, Philippines — At least 17 power companies are vying for a share of the government’s P10-billion financing program to support geothermal energy exploration across the country. Energy Undersecretary Rowena Cristina Guevara said 12 firms have already committed to applying for the Philippine Geothermal Resource Derisking Facility (PGRDF), a mechanism designed to reduce the financial risks associated with geothermal exploration. “If any of them backs out, there are five backups,” she said in a recent interview. Guevara did not name the companies, but said some of them are foreign-owned, although not fully. The Asian Development Bank, she said, is preparing to issue a tender to tap experts who will assist the Department of Energy in evaluating the applications. During its 10th meeting chaired by President Marcos, the Economy and Development Council approved the PGRDF, a move expected to accelerate geothermal development. The biggest risk in geothermal development comes during the exploration stage, as drilling wells does not guarantee viable results, leading to significant investment without assured returns. A single geothermal well, for instance, can require an estimated investment of $6 million to $8 million to drill. Through the PGRDF, however, the government will offer cost-shared exploration support to developers, potentially covering up to 50 percent of drilling costs through convertible loans. If drilling efforts are unsuccessful, the funding will be converted into grants to ease the financial strain on developers. “By de-risking exploration and enabling more projects to move from uncertainty to confirmation, we are widening the pipeline of investible geothermal opportunities, strengthening the resilience of our power system, and reducing our exposure to volatile imported fuel prices,” Energy Secretary Sharon Garin said. Currently, the Philippines ranks as the third-largest geothermal producer in the world, behind the United States and Indonesia.