Danish fund awarded first 100%-foreign RE contracts

By Sheldeen Joy Talavera

DENMARK’s Copenhagen Infrastructure New Markets Fund (CINMF) on Thursday signed agreements to develop three offshore wind sites, becoming the first company to obtain concessions after the renewable energy (RE) industry was opened up to full foreign ownership.

The sites, each covered by a Service Contract, are in Camarines Norte and Camarines Sur, with capacity projected at 1,000 megawatts (MW); Northern Samar (650 MW); and Pangasinan and La Union (350 MW).

Przermek Lupa, associate partner in Copenhagen Infrastructure Partners (CIP), which manages the fund, said the investment involved is $5 billion, with each service contract running for 25 years.

“As the first fully foreign entity to the renewable energy sector in the Philippines, we want to grow with the country. We want to be a catalyst for deploying large volumes of capital in sustainable projects,” Mr. Lupa said at the signing ceremony.

The projects are targeted to be completed within the tenure of President Ferdinand R. Marcos, Jr.

“If we can look at achieving COD (commercial operations date) by 2028, (it) means starting construction a couple of years earlier. That is the goal,” he said.

He said that the company will seek to conduct its dealings with the Department of Energy as a “one-stop shop,” and indicated the need to collaborate with the National Grid Corp. of the Philippines and other stakeholders.

“CIP believes that bold moves, scale, and speed (are critical in mitigating) the impacts of climate change. Of course, we know how the Philippines is particularly vulnerable to the effects of climate change,” he said.

Energy Secretary Raphael P.M. Lotilla said the projects will help accelerate the Philippines’ shift to indigenous and renewable sources of energy.

“These agreements represent an additional strategic investment and a firm commitment to strengthen the renewable energy sector, particularly the development of offshore wind,” he said. 

“They provide a significant contribution towards a low carbon future as well as encourage the development of the local supply chain,” he added.

Danish Ambassador to the Philippines Franz-Michael Melbin said foreign investors “are more comfortable taking 100% control of projects.”

He said that the Philippines’ target capacity of 40 gigawatts will depend on the availability of sites investors are interested in.

Mr. Melbin added that red tape has been a challenge for foreign investors. “Cut the red tape and we can cut the red ribbons,” he said, referring to the ribbon-cutting ceremonies at the launch of projects.

“The government can do a lot more for foreign investment by cutting red tape,” he said.

Niels Holst, a CIP partner and head of the CINMF, was quoted as saying in a statement that the removal of foreign ownership restrictions on renewable energy projects was a “positive signal” for entry of investments.

“We believe the Philippines holds great potential for low-cost power delivery from high-quality renewable energy projects that would deliver local employment and skills,” he said.