The Market Monitor Minding the Nation's Business
The World Bank has approved an $800 million loan to support the Philippines in accelerating its clean energy transition, enhancing electricity market competition, and improving water management systems.
In a statement released last week, the World Bank said the newly approved First Energy Transition and Climate Resilience Development Policy Loan aims to help the country shift toward renewable energy and bolster its resilience to climate impacts.
The funding is expected to significantly raise the share of renewable energy in the Philippines’ installed power generation capacity—from 30% in 2023 to 42% by 2027. It also supports the planned procurement of 1,000 megawatts of offshore wind power and the implementation of energy efficiency measures that could save up to 5 GWh per year.
“Focusing on renewable energy sources and using energy more efficiently can help the country reduce electricity costs, improve energy security, and cut down on pollution,” said World Bank Division Director for the Philippines, Malaysia, and Brunei Zafer Mustafaoğlu.
“Using more affordable renewable energy in the energy and transport sectors is crucial for the Philippines to build a strong economy,” he added.
The World Bank emphasized that investing in energy transition through locally sourced renewables, clean technologies, and energy-efficient solutions can help lower the cost of electricity generation and improve national energy security.
Further, expanding consumer choice in electricity providers and enhancing the country’s competitive procurement framework for renewables are seen as key steps to reducing power prices.
“To accelerate energy transition and keep electricity affordable for all Filipinos, the Philippines needs reforms to ensure achieving the government’s renewable energy and energy efficiency targets, improving grid capacity and flexibility, and enhancing competition in electricity markets,” said Feng Liu, World Bank Senior Energy Specialist and Task Team Leader.
“These reforms can help lower power supply cost and improve the reliability and resilience of the power system, thereby making electricity more affordable and reliable for Filipino households and businesses,” Liu added.
Part of the loan will also be used to support water sector reforms, particularly to improve coordination among national and local agencies, enhance water governance, and support investment in sanitation and supply systems.
“These reforms in the water sector are expected to increase access to safely managed water supply and sanitation services; raise funding and financing for water and sanitation projects; and improve the financial sustainability of local government-run water service providers. Ultimately, the DPL, a first for the Philippine water sector is a move toward more effective coordination, planning and management across sectors and levels of government,” said World Bank Senior Water Supply and Sanitation Specialist Maria Fiorella Fabella.