The Department of Energy (DOE) says the government is aiming to acquire an initial USD 250 million for a Geothermal Resource De-risking Facility (GRDF), designed to cushion financial risks for power producers exploring geothermal projects.
This facility will share exploration drilling costs with qualified developers, reducing risks at the pre-development stage.
In a report by Inquirer, DOE Renewable Energy Management Bureau director Mylene Capongcol said that the framework for the GRDF had already been settled.
The DOE is now seeking a financial partner to manage the facility, having already initiated discussions with the International Monetary Fund (IMF), Land Bank of the Philippines, Development Bank of the Philippines, Department of Finance, and Philippine Guarantee Corporation.
Additionally, the DOE is partnering with the Asian Development Bank (ADB) to identify which institution could fund the project.
Eligible companies will receive up to 50% of their initial exploration and drilling costs, according to Capongcol. She noted that the exploration phase is the “most risky” and often requires significant investment.
Meanwhile, Energy Development Corporation (EDC) vice president and head of the Business Development Group Marvin Bailon explained that firms typically allocate Php 1.5 billion to Php 2 billion for drilling two wells, in addition to surface studies and 3D seismic surveys needed to locate geothermal resources.
Bailon emphasized that government support in financing one or two wells would be a substantial boost for the sector, adding that once initial investments are overcome, the process becomes easier.
The DOE has proposed that the facility could recover its costs through interest on loans, royalty fees once projects are operational, and by securing a share in project equity.
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