THE PHILIPPINES' renewable energy (RE) sector is now open to full foreign ownership, the Energy department said on Wednesday.
Energy Secretary Raphael P.M. Lotilla signed on Tuesday a circular amending the implementing rules and regulations (IRR) of the Renewable Energy Act of 2008 to allow 100% foreign capital in RE projects.
Section 19 of the IRR had previously limited foreign ownership of RE projects to 40%.
The Department of Energy (DoE) said the circular now paves the way for foreign nationals and foreign-owned entities to explore, develop and use RE resources in the country such as solar, wind, biomass, ocean or tidal energy.
'With the impressive amount of interest, the DoE has been receiving both from the local and foreign investors in RE development, particularly in the offshore wind potential, the State can now directly undertake the exploration, development, production and utilization of RE resources or it can enter into RE service or operating contracts with Filipino and/or foreign citizen or Filipino and/or foreign-owned corporations or associations,' Mr. Lotilla said in a statement.
In the case of hydropower, he noted that the 'appropriation of waters direct from the source shall continue to be subject to foreign ownership in the Water Code.'
Mr. Lotilla said the relaxation of foreign equity restrictions will help the Philippines achieve its target to increase the share of renewable energy in the power generation mix to 35% by 2030 and 50% by 2040.
The current share of RE in the power generation mix is at 22%.
'The country has a vast potential in RE development,' Mr. Lotilla said, adding that the government expects higher investments in the sector that will create much-needed jobs.
Earlier, the DoE said opening the RE sector to full foreign ownership will not be to the detriment of Filipino-owned companies.
'The circular is as simple as we have tried for it to be focused only on ownership. There is no intention to change any process, any other vested rights that you have as key players in the sector. This is a mere opening up, removing the restriction on ownership. The other processes will still continue as is,' the DoE said over the weekend.
Foreign ownership restrictions have previously been blamed for the lack of investments in the RE sector.
In October, the DoE secured a legal opinion from the Department of Justice (DoJ) that stated that 'exploration, development, and utilization of inexhaustible RE sources are not subject to the 60:40 foreign equity limitation, as mandated by the Section 2, Article 12 of the 1987 Constitution.'
However, the DoJ said that the DoE would need to amend the IRR of the Renewable Energy Act to reflect the legal opinion.
President Ferdinand R. Marcos, Jr. has said his administration will focus on developing renewable energy in pursuit of energy security