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November 20, 2023

Sustaining the Wind of Reform in the Philippines




Sustaining the Wind of Reform in the Philippines

Although the Philippines has not yet made a formal net zero commitment or set any specific offshore wind (“OSW”) targets, there have been a series of actions beginning with the release of an offshore wind roadmap (“Roadmap”) last year by the Department of Energy (“DOE”) in conjunction with the World Bank Group, which demonstrates an intention to accelerate OSW development. 

This is not surprising given that the country is estimated to have a total OSW potential of 178GW, primarily due to its geographic location. In terms of realizable potential, the Roadmap estimates that in a low growth scenario, there is potential to install up to 3GW by 2040 which is in line with the DOE’s national renewable energy program goals. A high growth scenario may see up to 21GW within the same period. Either way, the Philippines is poised to be a significant OSW market in Asia. 

However, several practical challenges, mostly capable of resolution, currently remain in the way of realizing this potential.

OSW Policy and Regulatory Framework

To date, around 77 OSW projects with a potential cumulative capacity of 60 GW have been awarded to domestic and foreign entities. However, the lack of a clear policy and regulatory framework, including the absence of marine spatial planning and a coordinated, centralized permitting process, is a challenge. 

Actions taken by the government since last year are encouraging though. Following an executive order (“EO”) issued by the President of the Philippines on 19 April 2023, the DOE announced a policy and administrative framework for OSW development (“Framework”) on 16 June 2023.  The Framework requires all permitting agencies to submit the complete list of appropriate permits and clearances, including all requirements, fees and detailed process flow diagrams as set out in the EO, following which these permitting processes are to be integrated into the energy virtual one-stop-shop (“EVOSS”). EVOSS should enable OSW participants to lodge their applications, requests and make payment of applicable fees on the platform.  Additionally, under the EO and the Framework, the DOE is tasked with developing a marine spatial plan for OSW development in conjunction with other relevant government bodies. 

Foreign Ownership

A significant and further encouraging development has also been the removal of caps on foreign ownership of renewable energy assets in November last year. Previously, at least 60% of a project was required to be owned by one or more local partners. 

Equity structures with ordinary and preferred shares were developed to seek to satisfy this requirement while allowing a greater economic interest to be enjoyed by foreign investors, but such structuring often involved complicated corporate structures and funds flows, some of which were potentially open to challenge.  

Foreign investors can now own up to 100% in the exploration, development and utilization of renewable energy resources which is a significant step forward in easing the anxiety of deploying bespoke equity structures for foreign investors, and also in allowing local investors and foreign entities to partner without complex ownership, control and economic structuring. We understand that three projects have already been awarded to a 100% foreign owned entity, Copenhagen Infrastructure Partners, through its New Markets Fund.

However, whilst the interpretation (which is subject to final determination by the courts if ever challenged) of foreign ownership restrictions with respect to renewable energy has been eased to allow full foreign participation in the exploration, development, and utilization activities of renewable energy resources, there are still nationality restrictions when it comes to ownership of land and the leasing of public land in the Philippines. For this purpose, in order to qualify to own land or lease public land, a corporation must be at least 60% Filipino-owned. 

Although a foreign-owned corporation may lease private land in the Philippines, it may not lease public land. Foreshore areas and the seabed, which of course are vital for offshore wind, are treated as public land and therefore leases for these areas are currently limited to corporations which are at least 60% Filipino-owned. We understand that the DOE and the Department of Environment and Natural Resources of the Philippines (“DENR”) have been in discussions regarding public land leases but have yet to issue pronouncements addressing this issue.

Technology / Geography

The Roadmap states that up to 90% of the wind resource in the Philippines is found in waters deeper than 50 meters. OSW projects at such depths have increased costs for foundations or, if depths exceed the upper limit for fixed foundations, require the use of less-commercially mature floating offshore wind turbines, which will mean a higher cost of energy and this will need to be addressed from an engineering perspective.


While there is no dearth of wind resources for OSW projects, there are question marks on whether existing transmission grids are capable of meeting the needs of the awarded OSW projects. Together with transmission upgrades, there needs to be a widening of the scope of existing policy and regulations to recognize new-technology energy storage systems (“ESS”) that could, in turn, enhance grid reliability.  The DOE has published a draft ESS Policy considering new technologies, although it remains to be finalized.

Environmental and Social Considerations

The ambitious plans for giga scale OSW development and the likely density of projects raises questions on the cumulative impact of these projects on the environment and on society. 

In an article published by the Business Mirror on 4 June 2023, the DENR raised concerns regarding the impact on marine resources of the structures that will be set up and from the noise that will be created by the turbines. To seek to mitigate these risks, strict compliance with the Environmental Impact Statement System of the Philippines and a system for engaging with stakeholders and for careful planning of projects will be required.

In summary, despite challenges remaining around the practical implementation of projects, recent developments on the OSW front in the Philippines have been encouraging. The announcement of the Framework and the introduction of tax incentives to boost investment in OSW better position the country to achieve its target of 35% renewable energy by 2030 and 50% by 2040. The removal of caps on foreign ownership should also expand the pool of equity and financing available for OSW projects. The country has taken several steps in the right direction to accelerate the development of OSW projects, and this should lead to more partnerships between foreign and local companies and/or more wholly owned foreign projects. However, the pace of reform needs to be maintained with progress on technical and transmission issues as well if the country is to capitalize on its immense OSW potential.


Co-authored with (and thanks to the team at) Romulo Mabanta Buenaventura Sayoc & De Los Angeles, Philippines.


Kok Jin Ong (Jin)



+65 6230 3814

+65 6230 3814


Claude Jiang



+65 6230 3835

+65 6230 3835