The country’s leading business executives are urging the Marcos administration to adopt a build-operate-transfer (BOT) scheme in the country’s grid infrastructure, which could be pivotal in making power more affordable and reliable.
In a statement on Thursday, April 3, Makati Business Club (MBC) suggested that President Ferdinand “Bongbong” Marcos Jr. may consider penning an executive order (EO) to make this possible.
MBC said third-party investors, whether coming from the private sector or government-owned and/or -controlled corporations (GOCCs), should be allowed to build transmission infrastructure in the country.
The business group added that this will help accelerate grid development, addressing present bottlenecks and challenges in the energy sector.
The country’s limited grid infrastructure was cited as a major barrier in the pursuit of full electrification.
Based on last year’s data from the Department of Energy (DOE), the household electrification level stood at 93.12 percent.
The DOE is seeking to achieve 100-percent electrification by the end of President Marcos’ term in 2028.
Under a BOT scheme, a private entity finances, constructs, and operates an infrastructure facility for a fixed term, then transfers ownership to the government at the end of the agreement.
MBC said adopting this setup in the grid infrastructure would attract increased investments that would lead to improvements in transmission efficiency.
These investments, according to the group, will push a more robust development of renewable energy (RE), reducing long-term cost for the government and consumers alike.
“These improvements need to happen at a faster pace given the growing interest of investors in the Philippine RE industry,” it said.
According to the 2024 Climatescope report, the Philippines was ranked as the second-most attractive emerging market for RE investment.
However, citing data from the International Energy Agency (IEA), MBC pointed out that investments in RE have been outpacing grid spending since 2018, with an average funding gap of $200 billion.
A 2023 study by BMI Research said the funding gap has reached an average of $328 billion.
Under the Philippine Energy Plan, the government aims to boost the share of RE in the country’s energy mix to 35 percent by 2030 and 50 percent by 2040.
To achieve full electrification, MBC said it is also advocating increased public-private partnerships (PPPs) in off-grid solutions.