Opening of Philippines RE sector not detrimental to local investors

MANILA, Philippines — The Department of Energy (DOE) assured the public that the opening of  the country’s renewable energy sector to full foreign ownership would not be to the detriment of Filipino developers.

The agency said opening the market or investment for foreign resources does not mean that foreign investors are given preference.

It said that under the Constitution, preference is given to Filipino capital or interests by virtue of its constitutional mandate.

“It is stated in the Constitution that we do give preference to Filipinos, whether in the utilization of our natural resources or in investments.  Applications goes through legal, technical, and financial review in order to protect our interests,” the agency said.

“Should there be a need for foreign capital to help us reach the objective of the National Renewable Energy Program of reaching 35 percent renewable energy share by 2030 and 50 percent by 2040, that is welcome. But it is not because of having preference, but the bigger objective of having sufficient green energy for all Filipinos,” it said.

The agency said that based on its regular consultation and monitoring, projects – especially those involving emerging technologies such as ocean, offshore wind and tidal stream – can be funded by foreign investors since they have the expertise in these fields.

“These technologies are new in the country and costs are actually high. The DOE’s basis is on actual communication and linkage with various groups involved in renewable energy development. This is part of the DOE’s thrust to expand and accelerate the exploration of renewable energy potentials in the country,” it said.

Energy officials earlier said the amended guidelines of the Renewable Energy Act of 2008 are expected to be issued before the end of November.

The amendments to the implementing rules and regulations of the Renewable Energy Act will open up the renewable energy sector to 100 percent foreign ownership.

The DOE said the intention of the circular is not to change any of the classifications of renewable energy, but just the restriction in ownership.

“The circular is as simple as we have tried for it to be focused only on ownership. There is no intention to change any process, any other vested rights that you have as key players in the sector. This is a mere opening up, removing the restriction on ownership. The other processes will still continue as is,” the agency said.

The DOE is targeting to increase renewable energy’s share in the country’s power generation mix from the current 22 percent to 35 percent by 2030 and 50 percent by 2040.

“The objective here is not just for the DOE to focus only on renewable energy. We are looking for the perfect mix of renewables, conventional energy, and other sources of energy. Renewable energy technology has a lot of potential but it cannot be the only source of energy for the country,” it said.

The DOE earlier said foreign ownership restrictions that hamper the flow of investments in the renewable energy sector may now be relaxed following the legal opinion provided by the Department of Justice (DOJ).

The agency received a favorable development through a legal opinion provided by the DOJ on Sept. 29, paving the way for the opening of foreign investments in renewable energy.

The DOJ, in its opinion, stated that exploration, development and utilization of inexhaustible renewable energy source are not subject to the 60:40 foreign equity limitation as provided under Section 2, Article XII of the Constitution.

The DOJ, however, said the IRR of Republic Act 9513 or the Renewable Energy Act of 2008 must be amended to conform to the opinion.