THE World Bank has approved a $1.02-billion financing package to support the Philippines’ transition toward renewable energy and reduce the country’s reliance on imported fossil fuels.
The financing package includes a $1-billion loan from the International Bank for Reconstruction and Development (IBRD) and a $20-million grant from the Livable Planet Fund.
The World Bank said this was among the largest IBRD operations that it had approved in support of the Philippines’ development agenda.
“The Philippines has everything it needs to power itself at lower cost — wind along its coasts, sunlight year-round, and geothermal energy beneath its soil,” World Bank Division Director for the Philippines Zafer Mustafaoglu said on Monday.
“This operation helps turn those natural advantages into reliable, affordable electricity for Filipino families and businesses,” he added.
“This DPL (development policy loan) helps the Philippines take control of its own energy future, support growth, and create jobs.”
The World Bank said the Second Energy Transition and Climate Resilience Development Policy Loan aimed to address persistently high and volatile electricity costs that continue to weigh on households, businesses and overall economic competitiveness.
“By reducing reliance on imported fossil fuels and accelerating the deployment of homegrown energy solutions, the DPL will help shield the Philippines from global price shocks and put the country on a more secure and affordable energy path,” the Washington-based lender said.
The World Bank noted that reducing exposure to imported fuel prices would strengthen the country’s energy security while helping stabilize electricity costs over the long term.
Measures to be supported include the full operationalization of the renewable energy market, the integration of electric vehicle charging infrastructure into utility planning and the launch of the Philippines’ first offshore wind auction, which aims to contract 3.3 gigawatts of capacity by 2030, enough to supply electricity to millions of households.
Planned reforms are expected to mobilize around $7 billion in private investment, creating new jobs while expanding the country’s domestic clean energy capacity.
The Philippines is aiming to raise the share of renewable energy in its installed generating capacity to 42 percent by 2027, from 30 percent currently, helping diversify the country’s energy mix and reduce exposure to imported fuel price shocks.
The World Bank financing will also support reforms in the water sector, where more than 1,600 local government units are responsible for water service delivery but often face financial and institutional constraints.
It seeks to establish cost-recovery tariff frameworks, introduce a unified financing system prioritizing poor and climate-vulnerable communities, and implement bulk water pricing regulations.
The reforms aim to increase the number of local water service providers operating under sustainable business plans from 10 to 100 by 2027, improving water security across the country.
