- Denmark and the Philippines are firming up strands of cooperation on various facets of investments in the Philippine energy sector - not just for offshore wind projects, but also for the infrastructure buildup and market policy strengthening that could reinforce capital flow for RE and other energy ventures.
Denmark dangles deals, loans for PH energy investments
At a glance
COPENHAGEN - The Danish government and its private sector players have expressed willingness to participate in prospective public-private partnership (PPP) as well as extending concessional loans to various sub-segments of the emerging offshore wind (OSW) industry and in energy infrastructure facilities to ensure successful project implementation.
In an interview, Denmark Ambassador to the Philippines Franz-Michael S. Mellbin indicated that one key area they can extend help to the Philippine offshore wind industry will be on "concessional guarantees with EKF (Eksport Kredit Fonden or the export credit facility) of Denmark);” primarily for projects with Danish interest, either as project developers or technology suppliers.
“There are several strands of cooperation between Denmark and the Philippines in the energy area, so we’ll see greater interest from Danish suppliers – it’s not just about the OEMs, but the whole value chain. One of the things we need to start working more systematically with the Philippines will be on developing the value chain,” he stressed.
Mellbin explained “there are two ways we can help the Philippines - one is we do have export credit facility that would have a link to Danish supplier and Danish technology. We have the opportunity to help in concessional loans for that. We can do large-scale packaging for these kinds of export credit facilities – so that’s one opportunity.”
Previous investment participation of Danish companies in renewable energy projects in the Philippines include the supply of turbines by Vestas to the wind farm projects in Ilocos Norte, which has financing package from EKF as well as other Danish banks and financing institutions.
“The other is the opportunity for public-private partnership. Denmark has among the largest renewable energy investors in the world; and we have those large companies in the offshore wind sector. So we have broad experience with PPP models; and that would help in the private capital-based model of development,” the envoy added.
Primarily on the pronouncement of Energy Secretary Raphael P.M. Lotilla on "state financing" that is being explored to guarantee time-bound grid integration of offshore wind and other energy projects, Mellbin conveyed that Danish firms are “willing to invest in connectivity with the upgrading of the transmission system if there is a reasonable business case.”
As shared to the Philippine delegation by Denmark’s transmission system operator Energinet, the success formula employed to boost their offshore wind industry has been efficient and well-calculated planning and systematic site assessment pre-tender that is financed by the Danish Energy Agency, a state-run entity under Denmark’s Ministry of Climate, Energy and Utilities; as well as time-guaranteed grid integration of the facilities even prior to placing these RE capacities on auction by the government.
On the proposed repurposing of port facilities so they can keep pace with the unique requirements of offshore wind ventures, he stated that “what we can do is to extend concessional loans with the EKF model; and the contract is for Danish companies to be able to help out, like consulting services or for them to be part of the project.”
If the required infrastructure facilities as well as policies will be seriously concretized and enforced by the Philippine government, Mellbin opined that these will “help accelerate the investments that have been pledged already by the Danish companies, and there have been good talks about that.”
He further stated that one sphere of good follow-up discussion between the two countries is “on whether it could be interesting for the Philippines to try to become a hub for technically skilled people that could service the offshore wind industry globally; so that will be super interesting.”
On Executive Order No. 21 recently issued by President Ferdinand Marcos Jr. which targets to streamline permitting for offshore wind projects, the Danish envoy noted “that sends a very powerful signal to the market; and a very positive one that the Philippines is focused on making the country an attractive place to invest in when it comes to renewable energy.”
Apart from offshore wind, Danish investors are also interested in solar installations, prospective deployment of small modular reactors (SMR) for nuclear power, energy storage systems as well as energy efficiency ventures.