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Brix Lelis - The Philippine Star
February 12, 2025 | 12:00am
MANILA, Philippines — The Marcos administration wants to secure a loan from the Asian Development Bank this year to bankroll its geothermal risk reduction strategy, a senior energy official said.
“We need geothermal de-risking, meaning to say the government and the private sector will share in the risks of exploration of geothermal,” Energy Undersecretary Rowena Cristina Guevara said at a recent energy forum at the University of the Philippines-Diliman.
The main risk in geothermal development comes during the exploration stage, as drilling wells does not guarantee viable results, leading to significant investment without assured returns.
As such, a geothermal resource de-risking facility will help cost-share exploration drilling with qualifying private developers to de-risk geothermal resources at the pre-development stage.
“And we’re very happy that finally we’ll have a loan from the Asian Development Bank just to do that,” Guevara said, although she did not reveal the amount or the specific timeline for that.
But the official said in a follow-up statement that the energy department is hoping that the credit facility “will be finalized this year.”
“Geothermal cost is very high at the beginning, but after the 20-year period when the loan has been paid for the capital, it will become very cheap,” she pointed out.
An investment ranging from $6 million to $8 million is needed to drill one hole for geothermal exploration, Guevara said.
“The last time we were drilling holes was in 2012. There are no new geothermal (facilities) because exploration is expensive,” she said.
Earlier, Energy Assistant Secretary Mylene Capongcol said the government was looking to secure about $250 million to finance the geothermal de-risking facility.
According to Capongcol, state-run lenders Land Bank of the Philippines and Development Bank of the Philippines are being considered to facilitate the mitigation fund.
The energy department, meanwhile, is expected to lead in reviewing the eligibility of geothermal developers seeking financing.
