Despite the perceived low capitalization of US$50 million dangled to foreign investors for integrated geothermal resource exploration and power plant development in the country, the Department of Energy (DOE) disclosed that there are no takers yet of the blocks being offered by the government.
“We don’t know of any foreign company yet. There were companies that submitted letters of intent – these are two local companies,” DOE Director Mylene Capongcol said.
She noted that at least three geothermal blocks are being tendered to interested foreign investors: these are prospects in Daclan, Benguet; Puting Lupa in Laguna; and Mt. Labo in Camarines Norte.
“Five of the geothermal projects are pre-determined areas –three (3) of that will be viable for 100-percent foreign or under FTAA (financial or technical assistance agreement) arrangement; and we expect that by April, we would be able to identify already the winners,” she said.
From the evaluation of the DOE’s Renewable Energy Management Bureau (REMB), the bids that will pass the criteria and tendering process of the DOE will have to be endorsed to the Office of the Secretary for final approval.
The DOE announced in November that it is opening the country’s geothermal sector to full foreign participation so investments in the sector would flourish – and the initial venue for the interested international firms to firm up their interest will be via the 3rd Open and Competitive Selection Process (OCSP) for both geothermal and hydro projects.
The legal basis of the DOE in allowing 100-percent foreign stake in geothermal project is the prescription of the Renewable Energy Act defining geothermal as a mineral resource.
Meanwhile, aside from the pre-determined areas (PDAs) that had already been opened by the department to an auction process, Energy Secretary Alfonso G. Cusi indicated that interested parties can also nominate their preferred blocks or areas – and this will be subject to evaluation as well as a ‘bid challenge’ phase as prescribed by DOE guidelines for geothermal ventures.
“If they (investors) would like to nominate an area, they can do so and that will be processed,” the energy chief stated.
For the OCSP-3 auction process, Capongcol noted that the first publication was on December 15; while the second publication is slated by December 30 this year.
“In OCSP, they ’re bidding in a particular pre-determined area, so they will be evaluated based on technical and financial (criteria) – and then, we will recommend that for approval,” the energy official explained.