The Philippines’ geothermal industry has thrown its support behind the Department of Energy’s (DOE) plan to launch a USD 250 million facility that will help shoulder the high cost and risk of early-stage exploration.

The National Geothermal Association of the Philippines (NGAP) described the Philippine Geothermal Resource Derisking Facility as a major boost for developers who face steep upfront costs in proving new geothermal resources.

NGAP President Jaime Jemuel C. Austria, Jr. said the program directly addresses a long-standing hurdle. “And as Usec. Guevara has mentioned, if drilling is successful, then it will become a loan. And if it’s not successful, then it will become a grant. So that gives incentives for companies who are going into new areas to drill and explore and find more resources. This is very much aligned to the Philippines’ goal to increase its generating capacity, geothermal generating capacity, by de-risking the geothermal development process,” Austria said.

DOE Undersecretary Rowena Guevara, who unveiled the initiative at the 6th Philippine International Geothermal Conference, called the facility a “game-changing initiative” to accelerate geothermal development, enhance energy security, and support inclusive growth.

The USD 250-million fund will cover up to half of exploration drilling costs through convertible loans that may be written off as grants if wells prove unviable. By reducing financial exposure, the DOE hopes to spur investment in greenfield sites that have remained untapped despite the Philippines’ vast geothermal potential.

The country currently ranks third in the world for installed geothermal capacity, with 2,004 megawatts online and an additional 1,031 MW identified as prospective. But growth has slowed in recent years due to high development risks and permitting challenges.

Guevara said the derisking facility is part of a broader effort to reinvigorate the sector. The DOE is preparing to open two geothermal Pre-Determined Areas for bidding by December 2025 under the Open and Competitive Selection Process 5 (OCSP 5), with consultations scheduled this month. The department is also promoting direct-use applications of geothermal energy for agriculture, aquaculture, and industry.

The Philippine Geothermal Resource Derisking Facility is slated to run from 2026 to 2031, with submission to the Investment Coordination Committee this month and a call for proposals expected in the fourth quarter of 2025.

Will this funding plan finally break the cost barrier that has slowed geothermal growth in the Philippines? Share your views.

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