The Economy and Development Council of Philippines approved a 10.07 billion Philippine peso ($163.5 million) geothermal risk-sharing fund in an effort to accelerate baseload renewable additions, according to the Department of Energy statement on Thursday.
Financed through a sovereign loan from the Asian Development Bank and administered through the Land Bank of the Philippines, the state-backed mechanism provides conditionally repayable grants to private developers, it said.
Under the cost-sharing structure, the facility covers at least 50% of high-risk exploration and drilling costs.
The funding converts into a repayable loan if viable commercial resources are confirmed, but remains a permanent grant if exploration fails, DOE noted.
Energy Secretary Sharon S. Garin noted that the facility addresses the steep upfront capital barriers and four-to-six-year pre-operational timelines that historically constrained greenfield geothermal investment.
From a power markets perspective, expanding geothermal capacity is critical to the Philippines' statutory mandate to increase renewable energy's share in the generation mix to 35% by 2030 and 50% by 2040, DOE stated.
Unlike weather-dependent solar and wind assets, geothermal provides reliable, indigenous baseload power that insulates the domestic grid from volatile imported fossil fuel prices, it added.