Oct 272013

RECOGNIZING that energy investments are capital-intensive, the Department of Energy announced that financing schemes are available for investors seeking to make investments in energy projects.

At the Visayas Energy Investment Forum hosted by the department, Development Bank of the Philippines’ executive vice president Benel Lagua encouraged investors by providing financing schemes that they are comfortable with to pursue energy projects, especially in renewable energy.

DBP-funded renewable energy projects, he said, generate a total capacity of 165.09 megawatts, which contributed over one percent to the country’s total installed capacity of 16,163 megawatts as of 2012. Based on their records, they have funded 148.12 megawatts in Luzon, 10.50 megawatts in the Visayas and 5.97 megawatts in Mindanao.

These include a 2.5-megawatt mini hydroplant in Sevilla, Bohol, a substation for power distribution in Panglao, Bohol, a 55-megawatt diesel-fired power plant in Sarangani and a 900-kilowatt mini hydro plant in Sibuyan Island, Romblon.

He pointed out that energy projects are high on the bank’s priority as these contribute to the country’s economic development.


Lagua said the DBP provides project financing with technical assistance on environmental projects such as renewable energy where the repayment source is project cash flow and the loan security is the project’s assets, which he said he applicable for large and complex infrastructure like power plants and power transmission and distribution systems.

They also offer project preparation for renewable energy projects to encourage more development in this area. These include preparations for feasibility studies and detailed engineering.


Projects eligible for financing include power generation for both renewable and conventional energy sources, power distribution and transmission, energy efficiency and alternative fuels. Those eligible to apply for financing are private corporations, local government units, electric cooperatives, private financial institutions, and government-owned and controlled corporations.

Lagua said the DBP is the ideal institution for such schemes because it is known for its environment and security safeguards, medium to long term fixing of interest rates and its stability.

With fiscal and non-fiscal incentives provided for renewable energy projects under the country’s Renewable Energy Act, Lagua said opportunities are ripe for the development of renewable energy. He added that the low interest rates in the country’s credit market improves a project’s viability and affordability, while the high liquidity of local banks provides better opportunities for developers as they are competing for more clients.

But on the downside, Lagua admitted that there have been delays in the implementation of the incentives under the Renewable Energy Act while the limited local technical experts in renewable energy could increase transaction costs.

Published in the Sun.Star Cebu newspaper on October 28, 2013.

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