Government Backs Geothermal Expansion With ₱10-B Exploration Facility

Twelve local and foreign-backed companies are set to tap a ₱10.07-billion government-backed facility designed to reduce the financial risks of geothermal exploration and accelerate the development of new renewable energy projects in the Philippines, the Department of Energy (DOE) said.

The Philippine Geothermal Resource Derisking Facility (PGRDF), which received approval from the Economy and Development Council chaired by President Ferdinand Marcos Jr., will use a cost-sharing mechanism to help developers manage the risks associated with exploration drilling.

Energy Undersecretary Rowena Cristina Guevara said the DOE has identified 12 confirmed candidates for the facility, with five more groups on standby should any of the initial applicants withdraw.

The list of prospective participants, some of which have partnered with foreign investors, has already been submitted to the Asian Development Bank (ADB), the Department of Finance and the Department of Economy, Planning and Development, Guevara said.

The DOE has not disclosed the names of the companies.

The next step, Guevara added, is for the ADB to issue a tender for technical experts who will assist the DOE in evaluating project applications.

High-Risk Exploration

The PGRDF seeks to address one of the biggest obstacles facing geothermal developers: the substantial cost and uncertainty involved in confirming whether an underground resource can support commercial power generation.

Exploration and drilling are considered the riskiest stages of geothermal development. Companies may need to spend about $10 million to $12 million for each well without any guarantee that a commercially viable geothermal resource will be found.

Under the facility’s risk-sharing mechanism, unsuccessful drilling costs may be converted into grants, while funding provided for successful exploration projects will be treated as repayable loans.

The program was developed by the DOE and the Land Bank of the Philippines, with initial support from the ADB. The two government institutions signed an agreement in December for the rollout of the de-risking facility.

The DOE will serve as the executing agency, overseeing policy direction, governance, technical standards and eligibility criteria, as well as the program’s overall implementation.

Landbank, meanwhile, will act as the facility administrator and manager. Its responsibilities include handling subloan applications, overseeing milestone-based fund releases, collecting repayments, and preparing program reports.

“Geothermal development requires significant investment long before a single kilowatt is delivered to consumers,” Energy Secretary Sharon Garin said in a statement.

“Through the PGRDF, government is helping de-risk the exploration stage so that viable prospects can move faster from resource confirmation to project development,” she added.

Geothermal Investment Revival

The facility stems from a 2022 roadmap developed by the DOE and the ADB aimed at reviving investment in the country’s geothermal sector.

The Philippines was once the world’s second-largest geothermal energy producer but was overtaken by Indonesia in 2018. It remains among the world’s leading geothermal power producers, with around 1,300 megawatts of installed capacity.

First Gen Corp.’s Energy Development Corp. is among the major players in the domestic geothermal industry.

Unlike solar and wind power, geothermal energy can provide continuous baseload electricity, giving it a potentially important role in ensuring a stable supply of renewable energy as the Philippines expands its clean energy capacity.

The DOE and industry groups also see further geothermal development as a way to diversify the country’s energy mix and lessen its dependence on imported fossil fuels.

The National Geothermal Association of the Philippines (NGAP) said it supports the establishment of the PGRDF, describing the facility as a response to the high upfront risks associated with exploration drilling.

The group said the program could help revitalize greenfield geothermal development, unlock additional indigenous baseload renewable energy resources, and strengthen the country’s energy security and resilience.

NGAP President Jaime Jemuel Austria said the organization was ready to provide technical expertise, industry insights, and stakeholder support to help ensure the successful implementation of the program.

The association said new investments in geothermal energy could help maximize the contribution of the indigenous renewable resource to the country’s long-term sustainable development.

Source:

https://bilyonaryo.com/12-firms-shortlisted-for-p10b-state-fund-to-unlock-ph-geothermal-projects

https://businessmirror.com.ph/2026/08/31/12-firms-eyed-in-geothermal-de-risking

https://business.inquirer.net/608515/12-geothermal-energy-firms-seek-funding-boost