DOE readies $250-M derisking loan for geothermal energy exploration

The Department of Energy (DOE) is working on a multi-million dollar loan program to attract investments in geothermal energy exploration and development  in the country.

On the sidelines of the Economic Journalists Association of the Philippines (EJAP) Energy Forum in Makati City on Thursday, DOE Undersecretary Mylene Capongcol said the Energy Department along with the Asian Development Bank (ADB) and the Department of Economy, Planning and Development (DEPDev) are “working on a $250-million [loan] facility.”

Capongcol explained that the program, the Geothermal Resource Derisking Facility, aims to encourage investments in geothermal power development by “derisking” the high cost of the earliest stage of development which is exploration.

“The cost is so high that’s why we want to derisk the exploration stage of the project,” she said.

The Energy official explained that under the proposed loan facility the government will cover at least 50% of the cost of exploration or drilling for potential geothermal power sources through a loan which can be converted into a grant.

Capungcol said that if a developer’s exploration fails and there is not enough steam to generate power “it will be a grant… it will be considered a grant.”

“But if the exploration is successful, you will pay for the loan,” she said.

The DOE is planning to file the proposed geothermal resources derisking facility to the DEPDev’s Investment Coordination Committee within this year, with its planned roll out by next year.

“We want to encourage more geothermal developments... we noticed that it was left behind unlike wind and solar,” Capongcol said.

Based on the DOE’s data, the Philippines has a total geothermal installed capacity of 1,952 megawatts (MW) as of 2024.

Capongcol said that based on the agency’s assessment the country still has a potential of an additional 400 MW of geothermal power to be tapped. — RSJ, GMA Integrated News