The Philippines has secured an $800-million loan from the World Bank to promote renewable energy adoption, enhance the electricity market, and improve water utility management. The loan will support energy transition, energy efficiency, and the competitive procurement of renewable energy to lower electricity costs and increase energy security. It will be provided in two development policy loans aimed at supporting climate resilience reforms.
The first disbursement of the Philippines’ $800 million loan will strengthen regulations to promote renewable energy adoption in the coal-dependent nation. In 2023, coal accounted for 73,754 GWh of power generation, followed by renewables at 26,278 GWh. The loan will also help establish electricity market mechanisms to integrate renewable energy and improve competition, reducing electricity costs.The first operation of the loan will also support water financing and management reforms, promoting climate-resilient water supply and sanitation services.
These reforms aim to increase access to safe water, boost funding for projects, and improve the financial sustainability of local water providers, marking a step toward better coordination and management across sectors and government levels.The loan’s first operation aims to increase renewable energy share from 30% to 42% by 2027, support 1,000 MW of new offshore wind, and save 5 GWh annually through energy efficiency. Electrifying public sector vehicles and improving market reforms will help decarbonize the grid.
The program will drive long-term sustainability and private sector investment, supporting the DOE’s goal of 35% renewable energy by 2030 and 50% by 2040.The Philippine Energy Plan 2023-50 outlines goals including 10% energy savings on oil and electricity by 2050, 50% electric vehicle penetration by 2040, and the adoption of smart grid technologies. The World Bank highlighted the country’s dynamic economy, noting challenges such as growing dependence on imported energy, high electricity costs, and vulnerability to natural disasters.
