DoE seeks partners for geothermal risk reduction initiative
THE Department of Energy (DoE) on Tuesday said it is in talks with possible implementing partners to launch its project that seeks to reduce the risks of geothermal power projects in the country.
“We are talking to possible implementing partners,” Energy Assistant Secretary Mylene C. Capongcol told reporters in a Viber message.
Ms. Capongcol said in a recent interview that the DoE is working to de-risk the “most expensive and riskiest” part of geothermal development, which is the exploration phase.
“So part of that is the de-risking tool that we will be using,” she said.
The DoE official said that they will immediately launch the de-risking project once they have found an “ideal” implementing partner.
“Since this is private financing, the general framework involves addressing risks with de-risking tools, [which act] as a sort of guarantee for the project,” Ms. Capongcol said.
The Asian Development Bank (ADB) has initiated a de-risking project to support the DoE’s “continued thrust on the further development of indigenous geothermal energy sources in the country,” according to a briefer.
In August 2022, the ADB and DoE tapped Amala Clean Energy Advisors and its partners, GeothermEx and Parhelion Underwriting (Amala), as the consultants for the implementation of the project.
According to the briefer, Amala was able to finalize reports under the geothermal de-risking project after a series of consultations, meetings, and workshops.
“As observed, geothermal fields that are ready to proceed with drilling will require mobilization of risk (equity) capital, which most developers have struggled with thus far,” the briefer read.
“From the several commonly applied options for addressing this main issue, a cost-shared approach between the public sector and private developers for exploration drilling fits well with the present conditions in the Philippines,” it added.
The entities are proposing a geothermal resource de-risking facility that will “cost-share exploration drilling with qualifying private developers to de-risk geothermal resources at the pre-development stage.”
The DoE is expected to arrange for funding to capitalize the facility with the support of ADB as its anchor partner. — Sheldeen Joy Talavera