THE Department of Energy (DOE) said certifications being issued by the agency on projects exempt from the moratorium on the development of coal-fired power plants will ensure proponents will not run out of funding options.
“I have always been saying the coal moratorium has exceptions and those exceptions include companies who have committed to build a coal power plant before the moratorium was implemented,” said DOE Secretary Raphael Lotilla in a forum last Friday hosted by the Economic Journalists Association of the Philippines and Aboitiz Power Corp.
“To make sure financing does not dry up for these committed projects, the clarification or certification is very important, because they are part of our transition,” Lotilla added.
In 2020, the DOE implemented a policy banning the development of new coal-fired power plants.
However, the moratorium on coal-fired power plants explicitly provides projects that are in development prior to the implementation of the policy will still be allowed and only those that are starting from scratch will be prohibited.
Lotilla said the Bangko Sentral ng Pilipinas (BSP) also recently issued a clarification providing guidance on the financing of excluded activities and coal-fired power projects in relation to the adoption of the Sustainable Financial Financial Taxonomy Guidelines.
“The BSP has clarified financing coal or fossil fuel projects is considered an excluded activity and therefore outside of the scope of the guidelines. BSP supervised financial institutions may finance these excluded activities under the Sustainable Finance Taxonomy Guidelines,” Lotilla said.
The DOE emphasized that banks and financial institutions may grant loans to finance the needs of existing and operational coal-fired power generation facilities or any new coal-fired power projects, provided they are considered as committed projects, among other criteria.
“It is calibrated to meet the realities on the ground that our economy needs the additional power to be able to meet an average 6 percent GDP (gross domestic product) growth annually, we have to grow the power supplies and demand and generation capacity will also have to grow by an average of 5 percent annually. And since renewable energy (RE) cannot provide all of that, nor can provide the balancing source of power at this time, then it has to be the fossil fuels,” Lotilla explained.
