POTENTIAL geothermal developers could tap a $250-million loan facility to mitigate their exploration risk by the second half of 2026, the Department of Energy (DoE) said.
“This facility… is about accelerating geothermal development, strengthening energy security, and driving inclusive growth,” Energy Undersecretary Rowena Cristina L. Guevara said during the 6th Philippine International Geothermal Conference organized by the National Geothermal Association of the Philippines (NGAP) on Wednesday.
Ms. Guevara said the DoE filed its proposal with the Department of Economy, Planning, and Development Investment Coordination Committee for approval.
The government will begin soliciting proposals from developers by the fourth quarter of 2025.
Geothermal energy can serve as a source of baseload power, but exploration carries risks like large upfront investments before a resource is confirmed as viable.
The facility aims to share the cost of exploration and drilling, which is “the riskiest part” of the process. It can cover up to 50% of the drilling cost through loans convertible to grants if drilling fails.
“This approach reduces financial risk for developers and encourages investment in greenfield sites,” Ms. Guevara said.
Philippine geothermal energy capacity is 1,952 megawatts (MW), making it the third-biggest geothermal producer.
As of July, the government has awarded 31 geothermal service contracts with a combined potential capacity of 1,077.22 MW.
Ms. Guevara said geothermal developers also face other hurdles like the complex permit process.
“By addressing these barriers through policy reforms, investment incentives, and innovative programs, we can unlock the full potential of geothermal energy, powering our economy, creating jobs, and advancing our clean energy transition,” she said.
NGAP President Jaime Austria said that the group is looking forward to tapping the facility to reduce risk in drilling the initial exploration wells.
“That provides incentives for companies going into new areas to find more resources,” Mr. Austria said. “This is very much aligned with the Philippines’ goal to increase its geothermal generating capacity, by de-risking the development process.” — Sheldeen Joy Talavera