Climate Investment Funds backs PHL’s $500-million coal-to-RE transition plan
By Sheldeen Joy Talavera – June 5, 2024 | 8:44 pm
from Business World
PEXELS-PIXABAY
THE BOARD of the Climate Investment Funds (CIF) has endorsed a $500-million financing package that will support the Philippine transition from coal to renewable energy (RE).
The CIF said the package consists of $475 million in loans and $25 million in grants.
“This endorsement represents a major achievement in the Philippines’ journey away from coal and towards a clean energy future,” CIF Chief Executive Officer Tariye Gbadegesin said in a statement on Wednesday.
Ms. Gbadegesin said that the financing “will help ensure private sector buy-in, increased renewable energy development, and a just transition, for the benefit of the Filipino people and our planet.”
CIF said overall funding for the transition is expected to exceed $2.3 billion, with contributions from the Asian Development Bank (ADB), the World Bank, and the public and private sectors.
CIF is one of the world’s largest multilateral funds helping low- and middle-income countries adapt to and mitigate climate change.
“Together with the International Finance Corp. and the World Bank, we are committed to supporting the Philippines in achieving a just and inclusive energy transition that is a win for communities, the environment, and the economy,” according to Scott Morris, ADB vice-president for East Asia, Southeast Asia, and the Pacific.
The $500-million CIF package is included in the Philippines’ Accelerating Coal Transition (ACT) investment plan.
The plan calls for the early retirement or repurposing of Mindanao coal-fired power plants.
The Philippines plans to accelerate the retirement of up to 900 megawatts (MW) of existing coal generation capacity by 2027.
As of March, coal-fired power plants supplied 44.1% of the country’s mix, with combined capacity of 12,556 MW.
Through the ACT investment plan, the Philippine government “will progress their Nationally Determined Contribution, having committed to a 75% reduction in (greenhouse gas) emissions by 2030,” CIF said.
The funding will also support efforts to add 1,500 MW of renewable energy capacity by 2030, CIF said.
The Philippines aims to raise the share of renewable energy in the power mix to 35% by 2030 and 50% by 2040.
“The Philippine government’s commitment to energy transition through the CIF ACT Investment plan is commendable,” said Ndiame Diop, World Bank country director for Brunei, Malaysia, Philippines and Thailand.
“The World Bank looks forward to supporting the government’s efforts to establish the enabling policy and regulatory environment and scale up investments for a just, sustainable energy transition,” he added.
