Philippines to Launch $250 Million Geothermal De-Risking Facility to Boost Exploration Initiatives by 2026
In a significant move to bolster geothermal energy development, the Philippine government announced plans to establish a $250 million de-risking facility by the second half of 2026. This initiative, articulated by Energy Undersecretary Rowena Cristina L. Guevara at the 6th Philippine International Geothermal Conference, aims to mitigate the financial uncertainties associated with geothermal exploration, which often deters private sector investment due to substantial upfront costs.
The facility will provide critical financial support, covering up to 50% of drilling expenses through loans that can be converted into grants if drilling does not yield viable resources. This innovative approach is designed to share the risks associated with one of the most capital-intensive phases of geothermal development, encouraging developers to pursue exploration in greenfield sites.
As the third-largest producer of geothermal energy globally, the Philippines boasts an existing capacity of 1,952 megawatts (MW). However, the sector has faced persistent hurdles, including complex permitting processes and resource uncertainties. Guevara emphasized that addressing these barriers through policy reforms and investment incentives is essential for unlocking the full potential of geothermal energy, which can power the economy, create jobs, and facilitate a clean energy transition.
The Department of Energy (DOE) will begin soliciting proposals from developers in the fourth quarter of 2025, with the initial loan offerings expected to commence in early 2026. This initiative aligns with the government's goals to enhance the country's geothermal generating capacity, which is projected to reach 3,310 MW by 2050 according to the Philippine Energy Plan.
Jaime Austria, president of the National Geothermal Association of the Philippines, expressed optimism about the facility, highlighting its potential to encourage exploration and resource discovery. The DOE's commitment to this de-risking facility underscores a broader vision to accelerate geothermal development, strengthen energy security, and drive inclusive growth across the nation.
