By Luisa Maria Jacinta C. Jocson, Reporter
BRITISH INTERNATIONAL Investment (BII) considers the Philippines as one of its priority markets in Southeast Asia for climate finance.
“The Philippines is an important country of destination. We definitely want to support the entrepreneurs in the country who are willing to generate renewable energy (RE),” BII Managing Director and Head of Asia Srini Nagarajan told BusinessWorld in an interview on May 17.
The United Kingdom’s development finance institution is looking to partner with businesses involved in mitigating and increasing resilience to the impact of climate change, he said.
“I think the Philippines is definitely seen as the bright spot today, given the more recent 100% foreign investments allowed in the (RE) sector,” Mr. Nagarajan said.
Last year, the Philippine government opened the RE sector to full foreign ownership, as it aims to increase its share to the power generation mix to 35% by 2030 and 50% by 2040.
Meanwhile, BII on Monday announced it had reentered Southeast Asia through a $15-million commitment to the SUSI Asia Energy Transition Fund (SAETF).
The Southeast Asia energy transition infrastructure fund would also support investments in solar energy in the Philippines.
“SAETF targets infrastructure investments across the energy transition spectrum, including renewable energy, energy efficiency, and energy storage projects, and focuses on emerging economies in Southeast Asia, including the Philippines,” BII said in a press release.
In the Philippines, the fund will invest in the development of a ground-mounted solar photovoltaic plant through a joint venture with Pacific Impact. This project is in the early development stage.
It has also committed to finance future rooftop solar photovoltaic projects through a joint venture with Entoria Energy.
For the Indo-Pacific region, the BII has committed £500 million ($623 million) for climate finance.
“The whole idea behind this £500-million commitment is that it will be invested in climate-related assets. That includes utility, commercial and industrial (C&I), water, electric vehicles, waste management, and energy type projects. Biofuels are also something we should explore,” Mr. Nagarajan said.
The latest investment is also under the British Investment Partnerships (BIP) in the Philippines, which aims to “mobilize capital and technical expertise to support sustainable infrastructure development and the transition to clean energy in the Philippines.”
Mr. Nagarajan said there are many opportunities in the commercial and industrial sector in the Philippines.
“BII is very interested in developing the C&I market in the Philippines and neighboring countries. The cost of storage is still very high. Eventually, if you want to move more away from carbon-emitting sectors like coal, we have to get storage, so C&I is an important part of what we focus on,” he added.
However, Mr. Nagarajan noted that Asia still has to create more “bankable opportunities.”
“That’s probably what we can bring to the table — our ability to create those bankable opportunities because we’re willing to take greater risks, as opposed to a more conventional player,” he added.
He said having adequate transmission and distribution infrastructure will be crucial for climate projects.
“The Philippines does better on transmission distribution than many other emerging markets in Asia. But it’s also difficult to reach remote parts of the country,” he said.
Distributed generation can be one solution for the Philippines due to its geography.
“For example, if you want to stop burning diesel in the islands to protect the environment, we need a solution that is locally driven, such as tidal energy or any other form of renewable energy, where it does not depend on the central grid,” he added.
Mr. Nagarajan also noted the importance of a stable policy and regulatory environment if the country wants to attract foreign investors.
He recommended more transparent mechanisms like reverse bidding or electronic bidding and implementing offtake agreements.
“One of the things the government could do is to bring in a more transparent system of bidding,” he said.
Governments should also strike a balance between economic growth and meeting climate goals, the BII executive said.
“Gradually, we have to shift this capacity from coal and carbon-emitting sectors to renewable sectors. But the journey has to be gradual, so that it doesn’t hurt economic growth. BII is very committed to climate change. We do not support coal-related projects,” he said.
The Philippines has committed to a 75% greenhouse gas emission reduction and avoidance by 2030.