The Philippine government has approved a PHP 10.07-billion financing facility aimed at reducing exploration risks for geothermal projects, a move the Department of Energy (DOE) said is expected to unlock private investment, accelerate renewable energy development, and strengthen the country’s long-term energy security.

The Philippine Geothermal Resource Derisking Facility (PGRDF) was approved during the Economy and Development Council’s 10th meeting chaired by President Ferdinand R. Marcos Jr. The facility establishes a government-backed financing mechanism that shares the cost of geothermal exploration drilling—widely regarded as the riskiest and most capital-intensive phase of project development.

According to the DOE, lowering exploration risks is expected to encourage more developers to pursue geothermal projects, expanding the country’s pipeline of indigenous renewable energy investments.

“Geothermal development requires significant investment long before a single kilowatt is delivered to consumers. Through the Philippine Geothermal Resource Derisking Facility, the government is helping de-risk the exploration stage so that viable prospects can move more quickly from resource confirmation to project development,” Energy Secretary Sharon S. Garin said.

DOE said the initiative supports the government’s goal of increasing renewable energy’s share in the country’s power generation mix to 35% by 2030 and 50% by 2040. 

As a weather-independent source of baseload power, geothermal energy is expected to complement intermittent renewable sources while improving overall grid reliability.

 “By de-risking exploration and enabling more projects to move from uncertainty to confirmation, we are widening the pipeline of investible geothermal opportunities, strengthening the resilience of our power system, and reducing our exposure to volatile imported fuel prices,” Garin said.

The approval builds on the DOE’s efforts to establish a dedicated geothermal derisking program, including its 2022 partnership with the Asian Development Bank to develop a national geothermal derisking roadmap. The PGRDF translates those plans into a concrete financing mechanism to accelerate geothermal project development nationwide.

The DOE also sees the facility as an opportunity to strengthen the Philippines’ position in the global geothermal industry. The country was once the world’s second-largest producer of geothermal power by installed capacity before Indonesia overtook it in 2018.

“The Philippines has long been blessed with abundant geothermal resources. This facility gives us the opportunity to unlock more of that potential, attract greater investments, and pave the way for the next generation of geothermal projects that will deliver cleaner, more reliable, and more affordable energy for every Filipino,” Garin said.

What impact do you expect the Philippine Geothermal Resource Derisking Facility to have on geothermal investments and the country’s clean energy transition? Share your insights in the comments.

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