Geothermal Industry Welcomes ₱10-Billion Risk-Sharing Facility To Spur New Renewable Energy Projects
- July 14, 2026
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The Philippine geothermal industry has welcomed the government’s approval of a ₱10.07-billion Philippine Geothermal Resource De-Risking Facility (PGRDF), saying the initiative is expected to unlock new investments in geothermal exploration, strengthen the country’s energy security, and accelerate the development of indigenous renewable energy resources.
Approved by the Economy and Development Council (ED Council) during its recent meeting, the Department of Energy’s (DOE) flagship program is designed to address one of the biggest obstacles to geothermal development: the high upfront costs and uncertainty associated with exploration and initial drilling.
Milestone For Geothermal Development
The National Geothermal Association of the Philippines (NGAP) described the approval of the PGRDF as a major milestone for the local geothermal sector, saying it reflects the government’s commitment to expanding the country’s indigenous energy resources while reducing reliance on imported fuels.
“As the country’s first dedicated geothermal exploration risk-sharing facility, the PGRDF addresses the high upfront risks of exploration drilling and is expected to revitalize greenfield geothermal development, unlock indigenous baseload renewable energy resources, reduce dependence on imported fuels, and support long-term sustainable development,” the association said.
NGAP President Jaime Jemuel Austria said the organization remains committed to supporting the program’s implementation by providing technical expertise, industry insights, and stakeholder engagement to attract new geothermal investments.
Austria also acknowledged the collective efforts of the DOE, the Department of Economy, Planning, and Development, the Department of Finance, Land Bank of the Philippines, the Asian Development Bank (ADB), and other stakeholders that contributed to the creation and approval of the facility.
Addressing Exploration Risks
Geothermal projects require substantial investment long before electricity can be generated, with developers often spending heavily on exploration drilling without certainty that a resource will prove commercially viable. The PGRDF seeks to reduce these financial risks by sharing exploration costs, making it easier for developers to pursue new geothermal prospects.
The DOE has said the facility directly addresses the persistent barriers that have slowed geothermal expansion, particularly the high capital requirements and uncertainty during the early stages of project development.
“Geothermal development requires significant investment long before a single kilowatt is delivered to consumers. Through the PGRDF, the government is helping de-risk the exploration stage so that viable prospects can move faster from resource confirmation to project development,” Energy Secretary Sharon Garin said.
The ADB provided technical assistance in developing and implementing the risk-sharing facility, which is expected to encourage greater private-sector participation in greenfield geothermal projects.
Implementation Oversight
The operational framework for the PGRDF was established through a memorandum of agreement signed by the DOE and Land Bank of the Philippines in December.
Under the agreement, the DOE will serve as the executing agency responsible for policy direction, governance, technical standards, eligibility requirements, and overall program oversight.
LandBank, meanwhile, will administer and manage the facility, including evaluating sub-loan applications, releasing funds based on project milestones, collecting repayments, and preparing program reports.
NGAP said it had actively participated in stakeholder consultations, technical discussions, and industry engagements that helped shape the design of the facility by contributing technical knowledge, data, and operational insights.
Among Geothermal Leaders
The Philippines remains one of the world’s leading geothermal producers, ranking third globally behind the United States and Indonesia. DOE data show that as of March 31, 2026, the country’s total installed grid-connected power generation capacity reached 32,195 megawatts (MW), with geothermal plants accounting for 1,994 MW, or 6.2 percent, of the national total.
The DOE is also monitoring 31 geothermal service contracts with a combined potential capacity of more than 1,077 MW, highlighting the sector’s room for expansion should more exploration projects move forward.
Industry leaders said the de-risking facility could play a key role in unlocking these untapped resources, expanding the country’s baseload renewable energy capacity, improving long-term energy security, and supporting sustainable economic growth through greater use of locally available energy sources.
Source:
https://businessmirror.com.ph/2026/07/08/geothermal-practitioners-back-pgrdf
