US investors want foreign equity limit in RE lifted – Manila Bulletin
US investors have joined the clamor calling for lifting the foreign ownership limit in the renewable energy (RE) sector to be a priority policy for the Marcos administration to pursue to attract more offshore capital flows, mainly for solar and wind farm projects in the country. .
The president of the American Chamber of Commerce of the Philippines (AmCham), Frank Thiel, who is also the managing director of Quezon Power (Philippines) Ltd. Co., said easing restrictions on RE investment would be one of the “political wish lists.” that the foreign investment community will lodge with the energy secretary of the new government leadership.
“One of the things AmCham has been focusing on for some time is foreign ownership restriction on renewables. Maybe that’s something the new energy secretary can focus on,” he said.
According to the current legal framework, foreign investors are limited to hold up to 40% of the capital of legal entities that will develop or own power plant projects derived from renewable energies.
“Our collective view is that more foreign investment could take place if the restriction is lifted,” Thiel said.
Besides AmCham, other foreign chambers of commerce including the European Chamber of Commerce of the Philippines (ECCP), the Nordic Chamber of Commerce of the Philippines, Canadian, Australian, Japanese, South Korean investors as well as other Asian investors, all repeatedly demanded Philippine energy leaders will pursue legal measures that will facilitate their entry into the renewable energy investment space.
Currently, the policy tenor being explored by the Department of Energy (DOE) to relax the prescribed foreign equity limit on RE would be a legal convention similar to the Financial or Technical Assistance Agreement (FTAA) that has already been enforced. to other RE technologies, mainly for hydroelectric and geothermal projects.
Energy officials openly acknowledge that investments in the renewable energy sector could thrive with more foreign capital, as it is usually foreign investors who have the deepest pockets and have the most advanced technologies, as well as foreign investors. a wider expertise on the development of renewable energy projects.
As an industry player in the restructured power sector, Thiel also noted that the policy issue his company envisaged to be resolved by the new administration would be the regulations on the Competitive Selection Process (CSP) or the call for tenders launched by the public distribution services (DU) in securing electricity supply contracts (PSA) for the constitution of their supply portfolio.
He was primarily of the view that “the ‘unsolicited offer’ provision distorts the intent of the CSP and creates more confusion than otherwise. I hope this can be removed in the future.
Thiel qualified “We are competing well within the CSP process. The unsolicited offer part, however, not only makes the process confusing, but opens it up to interpretation. It’s hard for investors to get into it.
The CSP, which is a decree sanctioned by a decision of the Supreme Court, must be implemented by the DUs of the electricity sector so that they can guarantee supply at the most competitive tariff – and the result of this tender is considered more affordable once adopted. on consumers.
SUBSCRIBE TO THE DAILY NEWSLETTER
CLICK HERE TO JOIN