DOE inks finance guarantee from US Eximbank for RE projects

MANILA, Philippines - The Department of Energy (DOE) has signed a $1-billion financing guarantee from the US Export-Import Bank to support the Philippine government’s renewable energy (RE) and liquefied natural gas (LNG) development programs.

The DOE has recently signed a memorandum of understanding with US Eximbank. The MOU was signed by DOE Energy Policy and Planning bureau director Jesus Tamang, DOE undersecretary Ramon Allan Oca, DOE undersecretary Raul Aguilos, DOE undersecretary Loreta Ayson, US Eximbank director Patricia Loui, and US Department of Commerce deputy assistant secretary Holly Vineyard.

“The signing of the memorandum of understanding is an important venue to cultivate partnerships and cooperation between the Philippine government and the American private sector,” said DOE Undersecretary Raul Aguilos, adding that it can support the realization of energy projects in the country.

Under the MOU, the DOE and the US Eximbank will exchange information on trade and business opportunities and explore options for utilizing up to $1 billion in Eximbank loan guarantees and/or direct dollar loans to finance US exports in support of selected energy projects in the Philippines.

In particular, they will work together in promoting business development opportunities on RE and LNG facilities including port, receiving terminals, regassification facilities, pipelines and other transportation infrastructures.

The DOE is currently formulating a fuel mix policy that would encourage energy diversification that is cleaner and sustainable including RE and LNG.

By 2030, the DOE also targets an increase of 9,930 megawatts in the country’s RE capacity.

For LNG, the DOE is pushing for the development of a Natural Gas Master Plan with the technical assistance from the World Bank through its transaction advisors the Lantau Group and Arup. 

Conducted in three phases, Phases 1 and 2 of the plan will be on the establishment of an investment and transactional framework, which the DOE and the advisors are nearing completion of. Phase 3 will involve the creation of a master plan for the longer term.

The US Eximbank offers long-term financing at competitive terms that is available to public and private sector companies in the Philippines, and has a history of providing long term finance for energy projects in the Philippines. 

Since 1993, it has provided $1.3 billion in energy sector finance, virtually all of which has been repaid according to agreed loan schedules.

In 1994, the bank has financed geothermal power projects in the country including the Mahanagdong Geothermal power project in Leyte.