ADB to finance energy projects in the Philippines

ADB eyes direct financing of renewable energy projects in Philippines

Story by Louise Maureen Simeon 
Philstar Global
05 May 2024

TBILISI — The Asian Development Bank (ADB) is looking at directly engaging with the Philippine government on financing renewable energy (RE) projects as part of its country partnership strategy (CPS) over the medium-term.

In an interview with The STAR here, ADB country director for the Philippines Pavit Ramachandran said RE is an area that the multilateral lender is excited about as it crafts the new CPS.

“It would be a relatively new sector from the sovereign public sector side because as you know, the Philippines is a largely privatized market,” Ramachandran said.

“But given the focus and the policy ambition to increase renewable energy, there’s a lot of other aspects in the sector that need to be also strengthened,” he said.

For now, ADB is doing work with the private sector in terms of RE through loan deals such as the P5.5-billion sustainability-linked loan with ACEN Corp. of the Ayala Group in December last year.

Just last week, ADB also inked a P675-million loan agreement with Buskowitz Solar Inc. for the installation of solar panel systems on commercial and industrial buildings’ rooftops in the Philippines.

However, Ramachandran said ADB has not directly engaged on the sovereign side.

“Transmission capacity needs to be enhanced. You need to have a lot of the associated infrastructure, for example, port development for offshore wind. There’s also a need for de-risking for sectors like geothermal,” Ramachandran said.

“So that’s something we are looking at in these different areas and what would be the appropriate modality and lending scope,” he said.

In the Philippines, the government has been pushing for the use of renewable and indigenous energy sources amid the need to bring down the country’s dependence on energy imports.

Data showed that only 29 percent of the country’s current energy mix comes from renewables. The Department of Energy would like to bring it up to 35 percent by 2030 or to 50 percent by 2040, as outlined in the RE roadmap.

Further, Ramachandran emphasized that human development is another area that ADB will prioritize in the CPS 2024-2029 for the Philippines to fully tap into its demographic potential.

This is in relation to the Philippines’ goal of securing an upper-middle-income status amid the need to secure human capital foundation through education, health and social protection.