MANILA, Philippines — The Department of Energy (DOE) will seek for the revision of the foreign investment negative list to reflect the opening of the renewable energy sector to full foreign ownership.
“We are already preparing the request to the National Economic and Development Authority for the revision of the foreign investment negative list in order to clarify that renewable energy will not be subject to the 60:40 requirements,” Energy Secretary Raphael Lotilla said.
Lotilla signed on Nov. 15 Department Circular 2022-11-0034, amending Section 19 of the implementing rules and regulations (IRR) of the Renewable Energy Act of 2008.
The amendment enables foreign citizens or foreign-owned entities to engage in the exploration, development, and utilization of the country’s renewable energy resources, such as solar, wind, biomass, ocean or tidal energy.
The department circular will take effect 15 days upon its publication in two newspapers of general publication and filing with the University of the Philippines Law Center-Office of the National Administrative Register.
Its publication is expected this week.
“You can be assured that again, this is a case where we want to be able to attract foreign investments because the technological and financial requirements are enormous. And as far as the ability to carry out the obligations under the service contracts, they will be of course, strictly monitored, and the rollout will take place as such,” Lotilla said.
The DOE has been receiving strong interests from both local and foreign investors in renewable energy development, and this is expected to further increase with foreign equity restrictions relaxed.
“There are expressions of interest from all over. So whether it is directly from the companies themselves, or through their embassies that have called on the department, there have been various expressions of interest,” Lotilla said.
German-Philippine Chamber of Commerce and Industry executive director Christopher Zimmer said the renewable energy sector has always been an interest for many German investors when they consider doing business in the Philippines.
“Germany has a strong RE industry with a lot of know-how and experience that could contribute to the energy transition of the Philippines. We look forward to seeing the rules finalized so more companies can explore this sector’s large potential for cooperation and energy generation,” Zimmer said.
The Makati Business Club (MBC) also lauded the DOE for the promulgation of department circular which effectively removes foreign ownership restrictions on the harnessing of renewable energy.
The MBC said it is a timely reform given the global shift towards renewable energy to rely less on the currently volatile oil market.
“We also look forward to the job creating investments this reform will bring. We continue to support the DOE’s goal of increasing the share of renewable energy in the Philippine energy mix to 35 percent by 2030 and 50 percent by 2040,” the group said.