The Department of Energy (DOE) expects to finalize by year-end a de-risking facility with the Land Bank of the Philippines, supported by the Asian Development Bank (ADB), to make geothermal exploration less risky and attract more private investment into the sector.

Energy Secretary Sharon Garin said the agreement is in its final stages and will serve as a key financial instrument to help developers shoulder the heavy upfront costs of drilling and exploration.

Speaking with reporters at the sidelines of the Singapore International Energy Week (SIEW) 2025, Garin said the initiative is part of the government’s broader push to revive geothermal development and restore the Philippines’ global standing in the sector.

“We’ve already entered into an agreement—or wrapping up the agreement—with Land Bank. That’s an ADB facility. So soon enough, we will have that,” Garin said. “Hopefully, this will encourage more developers to embark on geothermal exploration.”

She added that the Philippines, once a world leader in geothermal power generation, has fallen behind other countries due to outdated policies and limited funding for exploration. The new financing mechanism, along with upcoming adjustments to auction terms, pricing structures, and contract durations, is meant to bring geothermal back to the forefront of the country’s energy mix.

Meanwhile, DOE Undersecretary Felix William B. Fuentebella, who joined Garin during the SIEW interview, said the Land Bank–ADB facility will serve as a risk-sharing mechanism between the government and private developers.

“It’s more of a de-risking facility,” Fuentebella said. “If I were a developer and I will explore a geothermal field, for example, and I spend ₱100 million but do not hit anything, I don’t need to repay it — it will be part of the grant. But if I hit anything, that would be tantamount to a loan that I can pay back from the proceeds of the geothermal field.”

He said the setup acknowledges the capital-intensive and uncertain nature of geothermal development, where companies must invest heavily in remote sites even before confirming viable steam resources. By absorbing part of that risk, the DOE and Land Bank aim to boost investor confidence and accelerate new exploration.

In earlier reports, the DOE said the Philippine government plans to tap the initial $100 million from ADB’s Geothermal Resource De-Risking Facility, part of a $250 million financing package, to make early-stage drilling and resource validation less risky for private developers.

The move aligns with calls from industry players for stronger government intervention in managing exploration risks.

Both Garin and Fuentebella reiterated that geothermal energy remains a critical component of the Philippines’ renewable energy strategy, with an estimated 2,000 megawatts of untapped potential nationwide. “It’s really one of our best assets,” Garin said. 

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