TAGUIG CITY - The Philippines is well on its way to a clean energy transition. Pushing for green energy development requires long-term financing and active participation from the private sector and financing institutions. However, even with the global trend towards green development and energy transition, the low rate of investments in these areas remain a major drawback.
To address the green financing challenge, as well as jumpstart the energy transition goals of the Philippine Energy Plan (PEP), Energy Secretary Alfonso G. Cusi recently signified his approval of and support for the implementation of the OECD Clean Energy Finance and Investment Mobilisation (CEFIM) Programme.
The OECD CEFIM Programme is helping scale up clean energy finance and investment by strengthening domestic enabling conditions in the areas of energy efficiency and renewable energy. Since 2019, the OECD has been successfully supporting a number of emerging economies in Asia and Latin America to mobilize private finance for clean energy infrastructure, as well as to develop bankable project pipelines. The Programme will provide an opportunity for the Philippines to highlight efforts and challenges in promoting renewables and energy efficiency deployment.
In the Philippines, the CEFIM will be implemented as the energy arm of a broader German-funded OECD programme on Sustainable Infrastructure for the Paris Agreement (SIPA). SIPA is supporting the Philippines (under the coordination of the National Economic and Development Authority), as well as a number of other countries across Southeast and Central Asia to accelerate investment in sustainable infrastructure projects.
Under the CEFIM, the Philippines can look forward to the development of the following:
• Clean Energy Finance and Investment Roadmap to support the country’s economic recovery plans and clean energy ambition through the identification of innovative financing solutions and effective investment vehicles, which will deepen local capital markets, bring in investors and attract international capital in clean energy. The Roadmap will bring together key government and private-sector stakeholders to agree on a clear action plan that identifies and addresses bottlenecks complicating or constraining finance and investment in the Philippines’ clean energy sector, thereby contributing to the implementation of the PEP.
• Implementation Support Activities, notably through the development of the Clean Energy Finance and Investment Database and Clean Energy Finance Training Programme. The database, to be jointly developed by the DOE, BSP, and/or the Securities and Exchange Commission, will provide insights into past and current trends in annual funding for clean energy projects (including type of instruments, tenor, cost, etc.) as well as the share of different energy-related assets in financial institutions’ portfolio. On the other hand, the Clean Energy Finance Training Programme seeks to help build capacity and fill the knowledge gap of the three core stakeholders (i.e., banks, government and project developers) that will be instrumental to achieve a clean energy transition. Most notably, it will help improve banks’ confidence in funding clean energy projects, while increasing the financial awareness of government policy makers to help them formulate investment-grade policies. Moreover, the Programme will provide project developers with an improved understanding of financial market expectations and business models for renewable energy and energy efficiency projects that can lead to bankable feasibility studies and project proposals;
• Investor Dialogues will be organized to facilitate matchmaking opportunities and multi-stakeholder dialogues with domestic and foreign investors and financial institutions to help unlock finance and investment in clean energy; and
• Regional peer-learning activities with Indonesia, Vietnam, Thailand, and other ASEAN countries. A Steering Committee and two Technical Working Groups, one each for renewable energy and energy efficiency, are also set to be created that will support, identify, and agree on the priority areas to be implemented in the Roadmap and Programme.
As the country moves towards a climate-safe future, initiatives encouraging “green” investments and financing, such as the CEFIM Programme, will now be a critical component of the Philippine Energy Plan, as well as the government’s post-pandemic programs.
For more information about CEFIM Programme: https://www.oecd.org/CEFIM/
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