Philippine Energy Policy Wiki

NREP 2020-2040 §E — Investment Themes and Financing RE

Status
operative
Confidence
high
Effective date
2020

Source: raw/_pdf/planning-docs/nrep-2020-2040.pdf Chapter: Chapter IV (Investment Themes and Financing Renewable Energy) Pages: pp. 60–65 (PDF pp. 73–78; offset = 13)

Scope

Chapter IV in full — the RE investment value chain, the financing landscape (sustainable-finance framework, GFI programs, green bonds), the fiscal-incentive implementing circulars, the CEFIM Programme, end-user financing for rooftop solar, and the foreign-participation limits.

RE Investment Themes and Financing Landscape (pp. 60–63)

RE Investment Themes (Figure 25): RE value chain opportunities for private sector — supply/manufacturing of equipment and components, EPC, O&M, technical advisory services.

Financing landscape:

  • BSP Circular No. 1085 (March 2020) — “Sustainable Finance Framework”: integrates sustainability principles in corporate governance/risk management of banks; promotes green financing for RE and climate change mitigation/adaptation [NREP 2020-2040, p.61, 2022]
  • PhP 217B+ invested in RE since RE Act promulgation
  • LandBank Climate SMART Financing: REAEAFP (Renewable and Efficient Alternative Energy Financing Program) — up to 80% project cost (private); up to 90% (government entities); GO GREEN for SMEs/LGUs using solar PV. LandBank is Philippines’ first GCF Direct Access Entity [NREP 2020-2040, p.63, 2022]
  • DBP Green Financing Program: up to 80% project cost (private); up to 90% (LGUs/government); eligible: RE generation, methane capture, WTE, rooftop solar PV [NREP 2020-2040, p.63, 2022]

Table 15 — Green Bond Issuances for RE (as of 2020) [NREP 2020-2040, Table 15, pp.62-63, 2022]:

  • Philippines issued first ASEAN green bond in 2016: AP Renewables (Aboitiz Equity Ventures) USD 220.4M (PHP 10.7B, Feb 2016)
  • Over USD 2.5B in green bonds issued as of August 2020; majority allocated to RE
  • AC Energy of Ayala Corporation: top issuer; bonds from USD 75M (Jan 2019) to USD 400M (Dec 2019)
  • Four commercial banks: BPI (CHF 100M Aug 2019 + USD 300M Sep 2019), RCBC (PHP 15B/USD 309M Feb 2019), China Bank (USD 150M Oct 2018), BDO Unibank (USD 150M Dec 2017)

RE Fiscal Incentives and Financing (pp. 64–65)

RE Fiscal Incentive Implementing Circulars

DC2020-02-0005 (13 February 2020) — “Guidelines on the Duty-Free Importation and Monitoring of the Utilization of RE Machinery, Equipment, Materials, and Spare Parts and their Transfer and Other Disposition”: implements RA 9513’s exemption from tariff duties for importation of RE machinery and spare parts, and for shipments necessary to manufacture or fabricate RE equipment and components [NREP 2020-2040, p.64, 2022].

DC2021-12-0042 (24 December 2021) — “Prescribing Amendments to Sections 13(E) and 18(C) of DC2009-05-0008 (IRR of RA 9513)”:

  • Section 13(E) — CIT Availment: Defines the process for RE developers to avail of the 10% Corporate Income Tax (CIT) rate under RA 9513; requires submission of Sworn Undertaking confirming savings from reduced CIT were passed on to electricity end-users as lower power rates; prescribes compliance monitoring of RE developers
  • Section 18(C) — Certificate of Endorsement (COE): Requires RE developers to secure a COE from the DOE per importation of RE equipment, materials, parts, and components (previously, one COE sufficed for multiple importations) [NREP 2020-2040, p.64, 2022]

CEFIM Programme Details

DO2022-02-0003 and SO2022-02-0005 — created the CEFIM Philippine Steering Committee and Technical Working Groups for RE and EEC&C (already documented in Clean Energy Finance and Investment (CEFI) Roadmap / CEFIM Programme ). The CEFIM Programme’s four activities per NREP [NREP 2020-2040, p.65, 2022]:

  1. Clean Energy Finance and Investment Roadmap — innovative financing solutions, investment vehicles to deepen local capital markets and attract international capital
  2. Implementation Support — Clean Energy Finance and Investment Database + Clean Energy Finance Training Programme
  3. Investor Dialogues — matchmaking between domestic and foreign investors and financial institutions
  4. Regional Peer-Learning — with Indonesia, Vietnam, Thailand, and other ASEAN countries

End-User Financing for Rooftop Solar

Pag-IBIG Fund (HDMF) extends multi-purpose loans to qualified members for home improvement; rooftop solar PV installation qualifies as home improvement — enabling homeowners to access Pag-IBIG financing for net metering program participation. Development and commercial banks, plus microfinance institutions, also offer similar products [NREP 2020-2040, p.65, 2022].

Foreign Participation Limits

60% Filipino ownership requirement applies by default. Exceptions as of NREP publication [NREP 2020-2040, p.65, 2022]:

  • Biomass and WTE — local capitalization requirement lifted (pursuant to Omnibus Guidelines, DC2019-01-0001)
  • Large-scale Geothermal (initial investment ≥ USD 50M, under FTAA) — pursuant to DC2020-11-0024 (“Adopting the Guidelines Governing the 3rd Open and Competitive Selection Process (OCSP3)”); allows 100% foreign ownership

Raw extraction: pdftotext output