To aid the country in the "energy transition" agenda, the government will be tapping into the Clean Energy Finance and Investment Mobilisation (CEFIM) programme of the Organisation for Economic Co-operation and Development (OECD).
According to the Department of Energy (DOE), the CEFIM program could serve as a vehicle to stimulate "green financing" that shall be funneled to renewable energy (RE) developments as well as energy efficiency ventures that will usher in a climate-safe and clean energy future for the Philippines.
The department admitted that “even with the global trends toward green development and energy transition, the low rate of investments in these areas remain a major drawback” and the Philippine energy market is not an exception when it comes to green financing hurdles.
On that end then, DOE Secretary Alfonso G. Cusi had given formal go-signal on OECD CEFIM to be enforced in the country “to address the green financing challenge, as well as jumpstart the energy transition goals of the Philippine Energy Plan (PEP).”
The department explained that “the OECD CEFIM Programme is helping scale up clean energy finance and investment by strengthening domestic enabling conditions in the areas of energy efficiency and renewable energy.”
In the country, the DOE expounded that CEFIM “will be implemented as the energy arm of a broader German-funded OECD program on Sustainable Infrastructure for the Paris Agreement” or SIPA, and this will be channeled through the National Economic and Development Authority (NEDA).
Via the CEFIM, the government is targeting to institutionalize a ‘clean energy finance and investment roadmap’ that can “support the country’s economic recovery plans and clean energy ambition through the identification of innovative financing solutions and effective investment vehicles, which will deepen local capital markets, bring in investors and attract international capital in energy.”
The targeted roadmap will likewise “bring together key government and private sector stakeholders to agree on a clear action plan that identifies and addresses bottlenecks complicating or constraining finance and investments in the Philippine clean energy sector.”
There will also be "implementation support activities" to enhance the capacity of relevant agencies – such as the DOE, Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC) – primarily in instituting a database that will document past and current trends in annual funding for clean energy projects, including those on the type of instruments availed of by project developers, as well as the tenor of loans and then project costs.
The capacity enhancement initiatives, it was noted, will “improve banks’ confidence in funding clean energy projects, while increasing the financial awareness of government policymakers to help them formulate investment-grade policies.”
Further, the DOE indicated that “the program will provide project developers with an improved understanding of financial market expectations and business models for renewable energy and energy efficiency projects that can lead to bankable feasibility studies and project proposals.”
At the same time, investor-dialogues will be organized “to facilitate match-making” primarily with domestic and foreign investors and to galvanize financial institutions to unlock finance and investment for clean energy installations.