BSP forum tackles financing energy transition

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The Bangko Sentral ng Pilipinas (BSP) hosted its first-ever Knowledge Exchange Forum on August 30, 2024, focused on financing the Philippine Energy Transition Program (PETP).

Held at the BSP head office in coordination with Citi Philippines and the Department of Energy (DOE), the forum brought together government officials, energy market players, and financial institutions to address the financing challenges and opportunities of transitioning to clean energy.

BSP Governor Eli M. Remolona, Jr. highlighted the importance of energy transition to global climate action and the role of climate finance in achieving this goal.

“Energy transition is central to global climate action, and consequently to climate finance,” Remolona said.

He noted that although renewable energy (RE) projects lead sustainability financing efforts by local banks, the investment gap remains significant.

The Philippine Energy Transition Program aims to increase RE’s share in the country’s power generation mix to 50% by 2040 while ensuring energy security and affordability. DOE Secretary Raphael P.M. Lotilla emphasized the critical role of financial institutions in supporting this transition.

“The financial sector, therefore, needs to walk in step with our energy transition, which is always going to be anchored on and supportive of the country’s primary development objectives,” Lotilla said.

Trillion-Peso Investment Need

DOE Undersecretary Rowena Cristina L. Guevara presented that around Php 28 trillion in investments will be required to achieve the clean energy scenario under PETP. This investment will focus on the development of offshore wind energy, green transmission systems, port infrastructure, and repurposing coal-fired power plants.

The forum featured two panel sessions. The first session, moderated by BSP Assistant Governor Pia Bernadette Roman Tayag, discussed clean energy projects and policy insights to boost project viability. Panelists included ACEN President and CEO John Eric T. Francia, AboitizPower President and CEO Danel C. Aboitiz, Alternergy President and CEO Gerry P. Magbanua, and DOE Undersecretary Guevara.

The second session covered energy financing perspectives from financial leaders and regulators, including BSP Assistant Governor Lyn I. Javier and representatives from the Bank of Makati, Development Bank of the Philippines, Rizal Commercial Banking Corporation, and International Finance Corporation. Citi’s Asia-Pacific Sustainability Head Crispian Cuss moderated the discussion, offering regional insights into the energy transition.

Path Forward

Citi Philippines CEO Paul A. Favila concluded the forum by stressing the need to direct capital toward clean energy technologies and infrastructure. “It is critical for all of us to continue working toward achieving our energy transition goals and pursuing our climate-related targets,” Favila said.

The BSP Knowledge Exchange Series on Inclusive Sustainability aims to bridge knowledge gaps and foster collaboration to advance sustainability in the Philippines, aligning with the country’s broader climate goals outlined in the Philippine Energy Plan 2023-2050.

Governor Remolona underscored the importance of inclusivity in the energy transition, cautioning that a poorly managed shift could impact marginalized communities by limiting energy access and increasing job losses. “Inclusion is a crucial lens for our energy transition,” he noted, advocating for an equitable transition to clean energy sources.