The government is eyeing a $250-million funding facility to support geothermal projects and establish a geothermal resource de-risking facility (GDRF), the Department of Energy said Wednesday.
The GDRF is expected to unlock the country’s untapped geothermal potential estimated at 4,000 megawatts towards becoming the world’s biggest geothermal producer anew. The Philippines is the world’s third biggest geothermal producer next to the United States and Indonesia.
DOE assistant secretary Mylene Capongcol said the GDRF concept paper and framework was completed, but they were still looking for a project implementor and the fund manager.
“We are finalizing who to designate,” Capongcol said at the sidelines of the 5th Philippine International Geothermal Conference organized by the National Geothermal Association of the Philippines.
She said the DOE was in talks with the Department of Finance and financial institutions such as the Asian Development Bank, International Monetary Fund, Land Bank of the Philippines, Development Bank of the Philippines and Philippine Guarantee Corp. for the financing of the facility.
Capongcol expressed hope the facility would take off “as soon as we identify the partners and the selection of team that will lead the administration and management.”
She said the ADB had validated numerous challenges for geothermal exploration and development in its study “Roadmap to De-risking Geothermal in the Philippines” such as environmental and social approvals, resource characteristics, inability to secure loans to cover high upfront costs and power off-take uncertainties.
“This derisking facility will surely boost interest in undertaking exploration drilling in the years to come, and eventually lead to the development of more geothermal projects,” Austria said.
Initial exploration costs for a geothermal well range from P1.5 billion to 2 billion.
Under the project brief, the proponents are looking for an entity that would house the GDRF, with state-owned Philippine National Oil Co. (PNOC), National Development Co. (NDC) and Power Sector Assets and Liabilities Management (PSALM) Corp.
The proposed GRDF will share exploration drilling cost with qualifying private developers to de-risk geothermal resources at the pre-development stage.
The DOE will arrange funding to capitalize the facility with the support of ADB as its anchor partner.
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