SINGAPORE — The Asian Development Bank (ADB) is looking to extend up to a billion-dollar financing to strengthen the Philippine grid system in anticipation of the entry of new capacity coming from renewables, especially offshore wind.
“We are looking at strengthening your national grid,” ADB Senior Director for Energy Priyantha Wijayatunga told reporters on the sidelines of the Asian Clean Energy Summit here on Wednesday.
Mr. Wijayatunga said that a request was sent to ADB to support the country’s grid, adding that the transmission system “has not been adequately strengthened in recent times to absorb renewable energy from offshore wind.”
The ADB official said that the loan may be extended in a form of sovereign or non-sovereign financing.
“Maybe even up to about a billion dollars. It can be. It’s a lot of money, not small money, because you need a lot of money when it comes to these large investments,” he said when asked on the amount the loan may entail.
While finalizing the loan may take a while, Mr. Wijayatunga said that grid investments are necessary to allow the capacity intake from new renewable energy projects, particularly the upcoming huge load from offshore wind.
The government is gearing up to conduct the fifth round of green energy auction this year, focusing exclusively on fixed-bottom offshore wind technology with an installation target of 3,300 megawatts (MW).
As of April, the Department of Energy has awarded 1,392 renewable energy service contracts, which is equivalent to a potential capacity of 151.53 gigawatts.
At present, the country’s nationwide transmission system is being operated by the National Grid Corp. of the Philippines (NGCP) through a 25-year concession and a 50-year congressionally granted franchise.
NGCP officially started operations as power transmission service provider in 2009, having the right to operate and maintain the transmission system and related facilities, and to exercise the right of eminent domain as needed to construct, expand, maintain, and operate the transmission system.
Prior to the proposed financing support in grid system, the ADB previously approved a loan package that will help establish the $190-million Geothermal Resource De-risking Facility to stimulate geothermal investment in the Philippines.
The government plans to launch the geothermal de-risking facility by the second half of 2026 to help address exploration risks.
The facility is designed to share the cost of exploration and drilling, covering up to 50% of expenses through loans convertible to grants if drilling fails.
The Philippines’ geothermal energy capacity is 1,952 MW, making it the world’s third-biggest geothermal producer. — Sheldeen Joy Talavera
