DOE: Foreigners now allowed to explore renewable energy resources in Philippines

Foreign investors or companies may now engage in the exploration, development, and utilization of the country’s renewable energy (RE) resources after the Department of Energy (DOE) amended a section of the Implementing Rules and Regulations (IRR) of the Renewable Energy (RE) Act of 2008.

In a statement on Wednesday, the DOE said Energy Secretary Raphael Lotilla signed, on November 15, 2022, the Department Circular (DC) No. 2022-11-0034.

The said circular 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 Energy department said the amendment stemmed from the opinion released by the Department of Justice (DOJ) on September 29, 2022.

It said constitutional foreign ownership restriction on the exploration, development and utilization of natural resources only covered those susceptible to appropriation, thus excluded the sun, the wind, and the ocean or tidal energy.

Thus, the IRR of the RE Act of 2008 needed to be amended to conform to the DOJ opinion.

“With the impressive amount of interests the Department of Energy has been receiving both from the local and foreign investors in RE development, particularly in the offshore wind potential, the State can now directly undertake the exploration, development, production and utilization of RE resources or it can enter into RE Service or Operating Contracts with Filipino and/or foreign citizen or Filipino and/or foreign-owned corporations or associations”, Lotilla said.

However, Lotilla said the utilization of water resources should continue to be subject to foreign ownership restriction.

In particular, Rule 6, Section 19 (B) of the IRR of the RE law states that “the exploration, development, production and utilization of natural resources shall be under the full control and supervision of the State”.

The RE law’s IRR further states that “the State may directly undertake such activities, or it may enter co-production, joint venture or co-production sharing agreements with Filipino citizens or corporations or associations at least 60% of whose capital is owned by Filipinos.”

“The country has a vast potential in RE development. Now that the foreign equity restrictions in the RE sector has been relaxed, we expect an increase of investments in the sector which would certainly contribute to our economy, provide jobs to our people, and help meet the goal of increasing the RE in the power generation mix of 35% by 2030 and 50% by 2040,” said Lotilla.

The DOE said the DC No. 2022-11-0034 will take effect 15 days upon its publication in two newspapers of general publication and filing with the University of the Philippines Law Center-Office of the National Administrative Register. —NB, GMA News