World Bank OKs $800-M Loan for PH Energy Transition, Resilience

The World Bank has approved an $800 million loan to support the Philippine government’s efforts to scale up the adoption of clean energy technologies, enhance the security, flexibility, and competitiveness of electricity markets, and improve water management.

Investing in energy transition by focusing on local renewable energy (RE) sources, energy efficiency (EE), and other clean technologies can help lower electricity generation costs while boosting energy security.

The Bank announced that its Board of Executive Directors had approved the First Energy Transition and Climate Resilience Development Policy Loan, aimed at helping the Philippines accelerate its energy transition and boost its resilience to climate change.

The loan is expected to increase the share of renewable energy in installed generation capacity from 30 percent in 2023 to 42 percent by 2027, support the procurement of 1,000 megawatts of new offshore wind capacity, and implement energy efficiency measures that will save 5 GWh annually.

World Bank Division Director for the Philippines, Malaysia, and Brunei, Zafer Mustafaoğlu, said, “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.”

He added, “Using more affordable renewable energy in the energy and transport sectors is crucial for the Philippines to build a strong economy.”

The World Bank noted that investing in energy transition by focusing on local renewable energy (RE) sources, energy efficiency (EE), and other clean technologies can help lower electricity generation costs while boosting energy security.

It added that expanding the number of consumers who can choose their electricity supplier and improving the framework for competitive procurement of renewable energy will help reduce electricity prices.

“To accelerate the energy transition and keep electricity affordable for all Filipinos, the Philippines needs reforms to meet the government’s renewable energy and energy efficiency targets, enhance grid capacity and flexibility, and improve competition in electricity markets,” said Feng Liu, World Bank Senior Energy Specialist and Task Team Leader for the project.

“These reforms can help lower power supply costs and improve the reliability and resilience of the power system, making electricity more affordable and dependable for Filipino households and businesses,” Liu added.

According to the World Bank, the loan will also be used to improve governance and coordination in the water sector by introducing policy reforms for water resource management and water supply and sanitation, promoting better collaboration between national and local governments.

“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, this DPL—the first for the Philippine water sector—is a step toward more effective coordination, planning, and management across sectors and levels of government,” said Maria Fiorella Fabella, World Bank Senior Water Supply and Sanitation Specialist.