Danish firm to invest $5B, inks 3 offshore wind service contracts

The Copenhagen Infrastructure New Markets Fund (CINMF) on Thursday signed three offshore wind (OSW) service contracts (SCs) with the Department of Energy (DOE) to develop a combined 2,000 megawatts (MW) of wind energy capacity across five provinces.

With the signing of three OSW service contracts, CINMF becomes the first 100% foreign-owned company to invest in offshore wind development in the Philippines.

Energy Secretary Raphael Lotilla and CINMF associate partner Przemek Lupa inked the deals during a signing ceremony in Taguig City.

CINMF is an affiliate of Danish fund manager Copenhagen Infrastructure Partners (CIP).

The SCs were the first deals signed following the lifting of foreign ownership restrictions on renewable energy development in the country.

In November 2022, the DOE issued Department Circular (DC) No. 2022-11-0034, which prescribes the amendment to the Section 19 of Department Circular 2009-05-0008 or the Rules and Regulations Implementing Republic Act No. 9513 or the RE Act of 2008.

The amendment allows 100% foreign ownership in the exploration, development, and utilization of sun, wind, and ocean or tidal energy.

“As one of the world leaders in offshore wind, CIP is proud to be the first 100% foreign-owned company to obtain such an award from the DOE, and we look forward to working together with the Philippine government and various authorities and to support their vision of developing and maturing wind and other renewable energy power generation in the country,” Lupa said.

The CINMF executive said the company is investing roughly $5 billion for the development of OSW energy generation facilities.

The three SCs, with a combined capacity of 2,000 MW, will be developed in offshore Camarines Norte and Camarines Sur (1,000 MW), offshore of Northern Samar (650 MW), and offshore of Pangasinan and La Union (350 MW).

Each SC has a 25-year operating period.

“These agreements represent an additional strategic investment and a firm commitment to strengthen the renewable energy sector in the country, particularly the development of OSW. They provide a significant contribution towards a low carbon future as well as encourage the development of the local supply chain,” Lotilla said.

The three SCs are expected to generate around 4,500 jobs during the development and operation period, generate enough power to supply about one million households, and offset about 2.9 million tons in carbon dioxide emissions per year.

“We are pleased with the entry of CINMF, a dedicated fund manager with greenfield renewable energy investments and one of the global leaders in OSW,” Lotilla said.

“They will be bringing in financial muscle and technological heft and will be working with Filipino partners throughout the construction and operation phases. They will work with the various coastal host communities in enhancing the local livelihood opportunities and environmental protection,” the Energy chief said.

For his part, Niels Holst, partner in CIP and head of CINMF, said the removal of foreign ownership restrictions on renewable energy projects in the Philippines in 2022 was an important event for them as it gave them positive signals to pour in investments in the country.

CIP has a portfolio of green energy projects totaling more than 100 GW and has raised approximately EUR 19 Billion for energy and associated infrastructure investments from more than 140 international institutional investors.

The Philippines and the Danish government have a long-standing cooperation in the development of wind power in the country.

The 25-MW Bangui Bay Wind Power Project, developed in 2004 by the Northwind Power Development Corporation (NWPDC) in Bangui, Ilocos Norte, was partly funded by the Danish Government through the Danish International Development Assistance (DANIDA).

To date, there are 57 OSW SCs awarded by the DOE, with a total potential capacity of about 42,000 MW that will be developed in the coming years.

The DOE is targeting to bring the RE share in the power generation mix to 35% by 2030 and 50% by 2040 from the current 22%.—AOL, GMA Integrated News