Stronger relations with major conglomerates are key in breaking coal dependence

Focusing on both gas-fired power generation and renewables as expectations rise for pumped-storage hydroelectricity

“We would like to further strengthen support through public-private partnerships,” says SAGAWA Hiroshi, JBIC’s Chief Representative in Manila. JBIC has held renewable energy seminars at the Philippine Department of Energy’s request, and helped structure and finance projects by connecting local and Japanese companies.

Around 60 percent of power in the Philippines currently comes from coal, 70 percent of which is imported―mainly from Indonesia. Concerns around depletion of domestic gas reserves are prompting the expansion of gas-fired power generation using imported LNG along with the transition to renewable energy sources.

The government is targeting 35 percent of energy from renewables by 2030 and 50 percent by 2040. To that end, the Department of Energy is pushing initiatives such as the Green Energy Auction Program (GEAP) and the development of offshore wind-dedicated ports. Meanwhile, local power companies are beginning to commit to retiring coal-fired power plants early.

Expectations are also growing for pumped-storage hydroelectricity as a flexible power source that can help stabilize the grid. Additionally, power grids connecting renewable energy and urban areas are urgently needed. However, power is a highly privatized sector led by conglomerates, with restrictions on foreign investment.

“Although the power sector has potential, forming projects involving Japanese firms requires strengthening relations with the conglomerates,“ explains SAGAWA. “JBIC is helping to facilitate these partnerships by serving as an intermediary from the early stages.”

The Philippines is taking steps toward a sustainable future, leveraging its partnership with Japan.

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