A WIND FARM is seen in Pililia, Rizal on April 25, 2021. – PHILIPPINE STAR/ MICHAEL VARCAS
The renewable energy (RE) sector in the Philippines is now fully open to foreign ownership, the Department of Energy announced on Wednesday.
Energy Minister Raphael PM Lotilla on Tuesday signed a circular amending the Implementing Rules and Regulations (IRR) of the Renewable Energy Sources Act 2008 to allow 100% foreign capital in renewable energy projects.
Section 19 of the IRR had previously limited foreign ownership of RE projects to 40%.
The Department of Energy (DoE) said the circular now paves the way for foreign nationals and foreign-owned companies to explore, develop and exploit RE resources such as solar, wind, biomass, marine or tidal power in the country .
“Given the impressive interest the DoE has received from both local and foreign investors in renewable energy development, particularly in offshore wind potential, the state can now directly undertake the exploration, development, production and use of renewable resources or enter into RE service or operation contracts with Filipino and/or foreign nationals or Filipino and/or foreign companies or associations,” Mr. Lotilla said in a statement.
In the case of hydropower, he noted that the “appropriation of waters directly from the source in the Water Code should remain subject to foreign ownership”.
Mr Lotilla said easing restrictions on foreign capital will help the Philippines meet its goal of increasing the share of renewable energy in the power generation mix to 35% by 2030 and 50% by 2040.
The current share of renewable energy in the power generation mix is 22%.
“The country has huge potential for renewable energy development,” Mr Lotilla said, adding that the government expects higher investment in the sector, which would create much-needed jobs.
Previously, the DoE said opening up the RE sector to full foreign ownership will not come at the expense of Filipino-owned companies.
“The circular is as simple as we have tried to just focus on ownership. There is no intention to change any process or other vested interests that you as key players in the industry have. This is a mere opening, the lifting of ownership restrictions. The other processes will continue unchanged,” the DoE said over the weekend.
Foreign ownership restrictions have previously been blamed for the lack of investment in the RE sector.
In October, the DoE obtained a legal opinion from the Department of Justice (DoJ) stating that “exploration, development and exploitation of inexhaustible RE resources are not subject to the 60:40 restriction on foreign participation as prescribed in Section 2. Article 12 of the 1987 Constitution.”
However, the DoJ said the DoE would need to amend the IRR of the Renewable Energy Act to reflect the legal opinion.
President Ferdinand R. Marcos, Jr. said his administration will focus on renewable energy development in the pursuit of energy security. — AEOJ