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Manila Bulletin devider Business devider DOE to assume responsibility in foreshore lease of foreign investors in offshore wind projects

DOE to assume responsibility in foreshore lease of foreign investors in offshore wind projects

Published Oct 7, 2023 02:27 am

At A Glance

  • <img src="https://images.mb.com.ph/production/mb-mkt-neo-prod-1-uploads-2/media/Offshore_wind_farm_2e39fe536a/Offshore_wind_farm_2e39fe536a.jpg" alt="Offshore wind farm.jpg">

The Department of Energy (DOE) will assume responsibility in the ‘foreshore lease agreement’ that the foreign investors will need to enter into with the Philippine government for their offshore wind (OSW) projects.

Energy Undersecretary Rowena L. Guevara indicated that the DOE can serve as the counterparty, “we will declare them (offshore wind) as DOE projects,” with her emphasizing that there will be no need for the foreign investors to tap a local partner for their warranted foreshore lease contracts.

The energy official qualified that is the remedy being pursued by the energy department for the companies that signed up for full foreign ownership in their service contracts.

That remedial measure being thought out by the DOE will first be referred to the Department of Justice (DOJ) for a legal opinion before it can be enforced as a policy for investments in the thriving renewable energy (RE) industry of the country, primarily for offshore wind.

The salvage zone for foreshore measures about 20 meters landward from the interior limit of the shoreline for easement purposes; and by edict, the lease for this is reserved to Filipino citizens and entities or corporations.

It is on that precept that the foreign investors with 100% equity in renewable energy (RE) service contracts have been encountering dilemmas, hence, the DOE is exploring legally feasible measures that will allow it to assume responsibility for the investors in the sector.

On the other dilemma of seabed lease or the use of the ocean floor for components of installations, particularly for offshore wind farm projects, Guevara indicated that it will be the Department of Environment and Natural Resources (DENR) that will act as counterparty for the lease agreements.

She added that a memorandum of agreement (MOA) between the DOE and the DENR will be firmed up soon to institutionalize policies and regulations for the foreshore and seabed lease arrangements for RE projects.

On the strength of a legal opinion that was issued by the DOJ last year, the Philippine government has relaxed foreign ownership restrictions in the RE sector – primarily for solar and wind farm ventures.

Following that enforcement, the DOE has been attracting multitudes of interested foreign investors for renewable energy projects – including those that have signed up for service contracts with 100% foreign equity.

Nevertheless, at permitting stage, they have been encountering dilemmas on lease arrangements that they will be entering into – especially on components of their construction that will traverse parcels of land that they will be needing for grid integration of the generated capacities. 

 

Related Tags

Department of Justice offshore wind Department of Energy renewable energy Department of Environment and Natural Resources
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