DOE greenlights full foreign ownership of renewable energy projects

Metro Manila (CNN Philippines, November 17) — The country's bountiful green energy resources may soon be harvested to its full potential — with foreign investors now free to take full ownership of renewable power projects.

This comes after the Department of Energy (DOE) greenlit amendments to the implementing rules and regulators (IRR) of the Renewable Energy Act, removing the foreign investment cap.

Previously under the law, a 60 to 40 equity rule states only 40% of businesses may be owned by foreign nationals.

Energy Secretary Raphael Lotilla, who amended the provision, said an "impressive" number of investors have already expressed interest in the country's resources.

"There are various nationalities, including Europeans [who] have extensive experience in offshore wind. And so, in this particular area, expressions have been made by such companies," Lotilla said in a briefing.

With the amendments to the IRR, foreign investors and companies can now take part in the exploration, development, and utilization of renewable energy.

These include natural resources like solar, wind, biomass, and ocean or tidal energy.

Lotilla is confident the move will help not just the energy sector, but the whole economy.

'Genuine competition'

With the move comes the challenge of keeping the preference for Filipino investors over foreign ones.

But the DOE allayed such concerns.

"One main concern was how protected the Filipino investors will be. That concern, I think, is basic in the constitution. Only when there is no Filipino investor in that same area can we entertain foreigners," said Energy Undersecretary Sharon Garin. "So, preference of Filipinos is still there."

Lotilla said obligations under the service contracts will be "strictly monitored."

"You can be assured that this is a case where we will be able to attract foreign investments because the technological and financial requirements are enormous," he said.

Meanwhile, for the Institute for Climate and Sustainable Cities, the policy shift will help create "genuine competition" and address power supply problems.

"Our local companies with assets in both re and non-re have more than enough on their plate, as evidenced by the outages in their existing power plants, allowing foreign investors and players to come in will help improve the current situation of the power sector," the group said in a statement.

"It will also help enable local companies by partnering with foreign entities that are already in the country, which have a global presence and are known for their technological innovation with respect to RE development," it added.