US firms to invest in RP energy sector — official

The government has swayed some American firms to invest in the country’s energy sector, a Cabinet official said, noting that President Benigno Aquino III will disclose them when he comes back from the US. “There are energy deals but the President will make the announcement," Energy Secretary Jose Rene Almendras told reporters over the weekend. The Energy Department has been wooing investors to finance some power-generation projects that would secure the government’s long-term energy requirements. The Philippines requires some 16,550 megawatts (MW) of additional power capacity by 2030, Almendras said. He pointed out that Luzon needs 11,900 MW of additional power capacity, while Visayas and Mindanao requires 2,150 MW and 2,500 MW, respectively. The country needs a whooping $24.825 billion worth of investments between now and 2030, Almendras said. Almendras recently sought the support of the World Bank for the country’s renewable energy projects that are more expensive to build because they are clean and indigenous, he said. Almendras also asked multilateral financing institutions to extend long-term financing to renewable energy projects to shield consumers from price shocks. “The market maybe hard to quantify, but the energy demand will continue to grow," he said, assuring lenders that there would be no market risks. Both the financiers and project proponents of renewable energy projects have to understand the need to mitigate the impact of the high cost of renewable energy projects to consumers, Almendras pointed out. The Philippines is among Asian countries with the most expensive power rates, he said. Almendras said that long-term financing will not only make the projects viable but also provide the country a buffer zone to rationalize energy prices. However, he said he cannot assure that the Aquino administration could bring electricity and fuel prices down. “But, at the very least, we can attempt to slow down the pace of which it grows," the energy chief said. The Energy Department has yet to approve around 400 pending renewable contracts, Almendras said, pointing out that the government has so far generated investment commitments of over P80 billion for renewable energy projects. Almendras noted that there is a need to maintain energy security, which, he said, is the “very strict and absolute requirement for economic stability." The country’s demand for energy is continuously increasing and renewable energy will help address this demand, he said. “As a matter of fact, some of us actually suspect that we are not yet seeing a full demand. Why? Because people are still pulling back, considering the fact that our supplies are actually quite constrained," Almendras added. —With Jesse Edep/VS, GMANews.TV