RE sector to be opened soon to full foreign ownership

Dec 11, 2022 | NEWS

Richmond Mercurio – The Philippine Star

MANILA, Philippines — The country’s renewable energy sector is set to be opened to full foreign ownership soon, according to the Department of Energy.

DOE officials said the agency wants the sector be opened to 100 percent foreign ownership before the end of the month, once amendments to the implementing rules and regulations (IRR) of the Renewable Energy Act are finalized and signed.

“So, before November ends,” DOE Assistant Secretary Mylene Capongcol said.

The draft amendments to the IRR of the Renewable Energy Act was already published for comments and public consultation last month.

“The IRR amendment does not only focus on the changes in the inexhaustible indigenous resources that are clean – basically ocean, wind and solar – but it also aims to provide the usual questions on whether or not biomass is open for 100 percent foreign participation. It also provides an answer for geothermal, whether or not it’s open for 100 percent participation and how it can be done. Also for hydro,” DOE Undersecretary Felix William Fuentebella said at the same forum.

“So that’s the clarification in the IRR that we are doing. It’s just that the law requires us to hold a public consultation before the changes in the IRR can be made. So it will be soon, but hopefully within November this year,” he said.

The DOE earlier said foreign ownership restrictions that hamper the flow of investments in the renewable energy sector may now be relaxed following the legal opinion provided by the Department of Justice (DOJ).

The agency received a favorable development through a legal opinion provided by the DOJ on Sept. 29, paving the way for the opening of foreign investments in renewable energy.

The DOJ in its opinion stated that exploration, development, and utilization of inexhaustible renewable energy source are not subject to the 60:40 foreign equity limitation as provided under Section 2, Article XII of the Constitution.

The DOJ, however, said the IRR of Republic Act 9513 or the Renewable Energy Act of 2008 must be amended to conform to the opinion.

To address the 40-percent equity limit for foreign investors stipulated in the IRR, the DOE has been preparing the necessary amendments to Rule 6, Section 19 of the IRR of the RE Law.

“The sector is now open to 100 percent ownership based on a recent opinion by the Department of Justice. The opinion accelerates the attainment of President Ferdinand Marcos Jr.’s programs to develop the country’s indigenous and renewable energy,” Energy Secretary Raphael Lotilla said.