DOE seeks ADB loan to de-risk geothermal

The government expects to secure a loan from the Asian Development Bank (ADB) this year to mitigate the risks associated with exploring geothermal resources in the Philippines.

“And we’re very happy to tell you that finally maybe we’ll have a loan from the Asian Development Bank just to do that (geothermal de-risking),” Energy Undersecretary Rowena Cristina Guevara said last week in Quezon City.

“We hope that it will be finalized this year,” Guevara said in a message.

Noting the high cost of harnessing this energy resource, the Department of Energy (DOE) has been exploring ways to facilitate geothermal investments.

“Geothermal, they’re very expensive,” Guevara said, adding the cost ranges between $6 million and $8 million per drilling.

“The last time we were drilling holes was in 2012. There are no new geothermal [projects] because exploration is expensive,” she said.

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Guevara said the DOE approached the Department of Finance and the National Economic and Development Authority (NEDA) to invest in energy infrastructure after 24 years.

The DOE was seeking $250 million in funding to implement a scheme aimed at reducing firms’ financial risks in pursuing geothermal projects.

The geothermal resource de-risking facility, which the agency previously said could be launched by next year, is envisioned to share the cost of exploration drilling with qualified developers, thus reducing risk when investing in geothermal resources.