Financing still RE investments hurdle

Manila Bulletin 
Published: June 30, 2013 
Securing project financing continues to be the biggest hurdle in the goal of scaling up renewable energy (RE) investments in the Philippines. This is a reality acknowledged by the World Wide Fund for Nature (WWF) in a collaborative study with World Resources Institute (WRI) which highlighted the key findings and setting the understanding for factors that have been hobbling countries from reaching their RE targets.
According to Samantha Smith, WWF global climate and energy initiative leader, “financing is a particularly significant challenge;” hence, they are calling on governments and financial institutions globally “to increase investments in RE.”
Banks, such Banco de Oro which recently divulged plans of providing $130-million loan to the proposed 67-megawatt wind power project in Rizal, have been indicating that they are lending to projects “not because of, but in spite of challenging investment policies for RE.”
Smith noted that “while setting targets represents a clear commitment to renewable energy, simply setting these targets is not enough.”
In the case of the Philippines, the initial target for RE installations that will be underpinned by feed-in-tariff (FIT) incentives will be 750 megawatts until 2015.
Some RE developers, however, are pursuing projects not anymore leaning on the FIT subsidy but on the strength of their track records in securing supply contracts with willing capacity off-takers.
Beyond financing, the other project implementation hurdles cited by WWF include social acceptance of RE as an option in the energy mix; transparency and accountability of decisions of policymakers; cost-competitiveness of resources; sufficiency of human capacity; and mapping the discrepancies and diverging interests of stakeholders.
Caution was likewise raised by WWF global energy policy director Stephan Singer, saying that “upscaling the implementation of RE is possible if countries avoid the mistakes and learn from the successes of countries which have pioneered implementation.”
To-date, WWF has emphasized that 138 countries have so far set their targets, with upscaled capacities eyed by 2020.
“But RE targets, important as they are, serve merely as icing on the cake,” Singer stressed, and addressing the inter-related concerns on investments would be as equally significant.
These shall include the need for cleaner energy option for the poor, financing for the cost of capital and infrastructure, grid integration as well as monitoring of successes. (MMV)  source