ADB to work with Philippine gov’t on RE project pipeline

By Justine Irish D. Tabile, Senior Reporter

THE ASIAN Development Bank (ADB) is working with the Philippine government to build a pipeline of energy projects to accelerate renewable energy (RE) deployment, improve energy efficiency, and reduce diesel dependence in off-grid areas.

“ADB is continuing to support the Philippines in scaling up RE by providing sovereign and non-sovereign financing, in addition to transaction advisory services,” ADB Country Director for the Philippines Andrew Jeffries told BusinessWorld, adding that the lender is working with the government to identify priority projects for future financing.

The proposed projects include support for a government energy management plan, a geothermal resource derisking facility to spur greenfield development, and initiatives to reduce diesel consumption in off-grid areas.

The planned projects come as the Philippines seeks to accelerate its energy transition and boost the share of RE in the power generation mix to 35% by 2030 from the current 26%.

ADB is also supporting the government through policy-based lending aimed at strengthening policies and regulations to scale up RE, diversify energy sources, and expand access to electricity.

Mr. Jeffries said the Philippines is well-positioned to attract the private capital needed to support its energy transition because of its largely privatized power sector and established regulatory framework.

“Its energy sector has been broadly privatized, and this is accompanied by a highly developed policy and regulatory framework. This has led to substantial levels of private sector investment,” he said, pointing to strong investor participation in the government’s Green Energy Auction (GEA) program.

The Department of Energy completed the fourth round of the GEA in November last year, awarding contracts to 123 winning bidders.

The government is also planning to offer at least 25 gigawatts (GW) of additional RE capacity through annual competitive auctions beginning this year.

“The successful implementation of a green energy auction program is evidence that the country is able to attract much needed investment in clean energy,” Mr. Jeffries said.

“The Philippines is likely to continue to be seen as an attractive destination for private sector investment — a prerequisite if it is to meet the unprecedented demand for electricity currently experienced across Asia and the Pacific region,” he added.

Mr. Jeffries’ comments came as ADB officials pushed for greater regional cooperation and private sector participation to address mounting energy challenges across Asia and the Pacific.

ADB President Masato Kanda warned that geopolitical tensions and rapidly rising electricity demand are exposing vulnerabilities in the region’s energy systems, underscoring the need for greater cross-border connectivity.

“If we attempt to operate our national energy systems in total isolation from one another, we will fail… To survive and thrive, we must build deeply connected, highly intelligent networks,” he said at the opening plenary of the Asia Clean Energy Forum on Tuesday.

ADB has recently launched the Pan-Asia Power Grid Initiative (PAGI) which aims to connect national and regional power systems and allow energy to flow across borders.

Under PAGI, ADB plans to commit $25 billion from its own balance sheet to help connect 22,000 circuit-kilometers of transmission lines, integrate 20 GW of RE into a regional system, reduce power sector emissions by 15%, and create 840,000 jobs.

However, Mr. Kanda said public resources alone would not be enough to finance the initiative, citing tightening fiscal space, rising debt burdens, and shifting aid priorities.

“The large pools of capital required for this transition exist right now in the private sector. The problem isn’t a lack of global capital; it is a lack of an enabling environment and the absence of real de-risking mechanisms,” he said.

To help mobilize private investment, ADB plans to quadruple its annual private sector financing to $13 billion by 2030 through blended finance, first-loss capital, and expanded guarantee instruments.

“We will do the hard work upstream to make these massive regional public goods genuinely bankable,” Mr. Jeffries added.