The Philippines has secured another $500 million from multilateral climate fund Climate Investment Funds (CIF) in its targeted transition to renewable energy.

The governing board of the CIF endorsed a new investment plan presented by the Philippine government, allocating $500 million for the transition from coal to renewable energy in the country, the fund said in a news release. CIF will provide $475 million in loans and $25 million in grants.

The Philippines’ Accelerating Coal Transition (ACT) investment plan will tap CIF’s concessional resources to facilitate the early retirement or repurposing of the Mindanao plant and other privately owned coal fired plants. In total, the country plans to accelerate the retirement of up to 900 megawatts (MW) of existing coal generation capacity by 2027. 

The CIF noted that 80% of impacted  employees are projected to gain access to sustainable income, in line with its target of a “just transition.”  

The funding will also support efforts to add 1500 MW of renewable energy capacity by 2030, which could include battery systems, offshore wind, floating solar and pumped hydro projects. Overall, the ACT investment plan is expected to reduce 33 million tons of carbon dioxide emissions by 2030.

In 2022, coal accounted for 44% of total installed capacity and 60% of total generation in the Philippines. It emits over 55% of the country’s greenhouse gas (GHG) emissions. As the coal is mostly imported, the fuel is also costly for the country.

The Philippines’ Commitment to Reducing Emissions

The Philippine government has committed to a 75% reduction in GHG emissions by 2030 and targets to increase the share of renewable energy to 30% of total energy generation in the same period, from 22% currently. 

The private sector currently produces 90% of the country’s energy capacity. The ACT investment plan will facilitate the implementation of a private sector decarbonization and repowering program designed to incentivize the transition away from coal and fast-track  the creation of renewable energy capacity.

The total co-financing of the Philippines’ energy transition is expected to exceed $2.3 billion, with investments from the Asian Development Bank, the World Bank Group, and the public and private sectors, according to the release.

President Marcos: Over 491,000 MW Ready in Renewables Sector

In a recent speech at the 6th Indo-Pacific Business Forum (IPBF) in Taguig City, President Ferdinand Marcos highlighted the potential of the country’s renewable energy sector, noting that over 491,821 MW are ready to be harnessed from sources such as geothermal, hydropower, solar, and wind.

Recent amendments to the Renewable Energy Act allow 100% foreign ownership of renewable sources, making the country an attractive destination for clean energy investments, President Marcos said.

“We intend to tap this vast potential as we target to increase the share of renewables in our power generation mix from the current 22% to 50% by the year 2040,” he shared.

The CIF is a pioneering multilateral climate fund delivering low-cost finance to over 70 developing countries. It provides large-scale, low-cost, and long-term financial solutions to support countries achieve their climate objectives.