The Department of Energy said over the weekend it is preparing the proposed changes in the implementing rules and regulations of the Renewable Energy Law to address the 40-percent equity limit on foreign investors.
It issued the statement after the Department of Justice released a legal opinion that the exploration, development and utilization of inexhaustible renewable energy sources are not subject to the 60:40 foreign equity limitation as provided under Section 2, Article XII of the Constitution.
“Private sector investments are central in achieving our renewable energy targets and vision for the Filipino people, and this is a welcome development for our foreign investors to invest in renewable energy production here in our country,” Energy Secretary Raphael Lotilla said.
The DOE said the DOJ opinion meant that foreign ownership restrictions that hamper the flow of investments in the RE sector may now be relaxed.
“This will certainly contribute to our target share of renewable energy in the power generation mix of 35 percent by 2030 and 50 percent by 2040,” Lotilla said.
The agency said the DOJ opinion would help accelerate the attainment of President Ferdinand Marcos Jr.’s programs to develop the country’s indigenous and renewable energy.
“The DOE is preparing the necessary amendments to Rule 6, Section 19 of the IRR of the RE Law,” Lotilla said.
Rule 6, Section 19(B) of the IRR of the RE Law stipulates that “the exploration, development, production and utilization of natural resources shall be under the full control and supervision of the State.”
It says 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 sixty percent of whose capital is owned by Filipinos. Foreign RE developers may also be allowed to undertake RE development through an RE service/operating contract with the government, subject to Article XII, Section 2 of the Philippine Constitution.”
Data from the DOE showed that RE investments reached P270.8 billion as of the end of June from 998 RE contracts with an aggregate installed capacity of 5,460.59 megawatts and a potential capacity of 61,613.81 MW.
“We are also enhancing our policies for renewable energy to attract more investors. Just very recently, we have increased the percentage of the utilization of renewable energy for on-grid areas from one percent to 2.52 percent,” Lotilla said.