Philippines eyes $100m ADB loan for geothermal de-risking - ThinkGeoEnergy
Published November 22, 2025
Philippines Seeks $100 Million ADB Loan for Geothermal De-Risking
The Philippine government is actively pursuing a loan of $100 million from the Asian Development Bank (ADB) aimed at de-risking geothermal energy projects in the country. This initiative is part of a broader strategy to enhance the nation’s renewable energy capacity and reduce reliance on fossil fuels.
The proposed loan will be utilized to support the development of geothermal resources, which are abundant in the Philippines. The country is recognized as one of the largest producers of geothermal energy in the world, ranking third globally after the United States and Indonesia. The Philippine Department of Energy (DOE) is optimistic that the financial assistance from ADB will help mitigate the risks associated with geothermal exploration and development.
Geothermal Potential in the Philippines
The Philippines has a total installed geothermal power capacity of approximately 1,900 megawatts (MW), contributing significantly to the country’s energy mix. Geothermal energy accounts for around 12% of the country's total electricity generation. The government aims to increase this capacity to meet the growing energy demands and to support its commitment to renewable energy development.
Geothermal energy is seen as a reliable and sustainable source of power, providing base-load energy generation. The DOE has identified several areas across the country with high geothermal potential, including regions in Luzon, Visayas, and Mindanao. However, the exploration and development of these resources often face challenges, including high upfront costs and geological uncertainties.
Loan Utilization and Expected Outcomes
The $100 million loan from ADB is expected to be allocated for various activities, including feasibility studies, geological surveys, and capacity building for local stakeholders. The funding will also assist in developing a regulatory framework that encourages private sector investment in geothermal projects.
By reducing the risks associated with geothermal exploration, the Philippine government hopes to attract more investments in the sector. This is particularly important as the country seeks to diversify its energy sources and enhance energy security. The DOE has set a target of increasing the country’s renewable energy capacity to 20,000 MW by 2040, with geothermal playing a crucial role in achieving this goal.
Collaboration with ADB
The collaboration between the Philippine government and ADB is not new. The ADB has been involved in various renewable energy projects in the country, providing financial and technical assistance aimed at promoting sustainable energy solutions. This new loan proposal reflects the ongoing commitment of both parties to advance the development of renewable energy resources in the Philippines.
In recent years, the ADB has emphasized the importance of clean energy in its operations, aligning with global efforts to combat climate change and promote sustainable development. The bank's support for geothermal energy projects in the Philippines is consistent with its strategy to enhance energy access and affordability in the region.
Challenges Ahead
Despite the potential benefits of geothermal energy, several challenges remain that could impact the successful implementation of projects. These challenges include regulatory hurdles, environmental concerns, and the need for advanced technology to harness geothermal resources effectively.
The Philippine government is aware of these challenges and is working to create a more conducive environment for geothermal development. This includes streamlining the permitting process and ensuring that environmental assessments are conducted efficiently. By addressing these issues, the government aims to foster a more attractive investment climate for geothermal energy projects.
Conclusion
The proposed $100 million loan from the ADB represents a significant step towards enhancing the geothermal energy sector in the Philippines. With the country’s abundant geothermal resources, this financial assistance could play a crucial role in de-risking projects and attracting private investments. As the Philippines continues to pursue its renewable energy goals, the collaboration with ADB will be vital in overcoming challenges and unlocking the full potential of geothermal energy in the country.
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