RE transition seen accelerated by Maharlika fund investments
ENERGY investments by the Maharlika sovereign wealth fund are expected to help ramp up the renewable energy (RE) buildout, a think tank said.
Energy projects are consistent with the goal of the Maharlika Investment Fund (MIF) of backing “high-impact projects,” according to the Institute for Climate and Sustainable Cities (ICSC).
“The fund can catalyze the advancement of RE and expedite the shift towards a sustainable energy landscape,” the ICSC said in an e-mail to BusinessWorld.
Maharlika Chief Executive Officer and President Rafael D. Consing, Jr. said in a forum last week that the energy sector will take in the bulk of the MIF’s initial investments.
“In terms of the amount we will commit for the year, I think a big portion of it really will be coming from energy,” Mr. Consing said.
MIF has an initial capital of P125 billion and initial authorized capital stock of P500 billion. It is set to make its first investment by the end of the year.
The Department of Energy (DoE) expects the energy sector to require a total investment of about $153 billion, with a $97-billion goal for RE, including the pre-development and construction of power plants.
As of January, the DoE awarded RE service contracts to 1,267 projects with total potential capacity of around 129,000 megawatts across various technologies.
The ICSC said that the board governing the MIF should align energy investment policy with national energy plans, particularly on climate action.
“It is also important to ensure transparency and accountability in the MIF’s allocation and utilization,” the ICSC said.
Obtaining loans and financing for RE projects can be challenging, it said, making it necessary for the industry to have access to financing options to make their projects viable.
It warned that the energy transition agenda could be “jeopardized” by any indication of an industry plagued by “slow and stagnant returns.”
Energy Secretary Raphael P.M. Lotilla said the DoE has yet to discuss potential investments with the MIF.
“Although we have heard the emphasis that was given to energy being an area of investment for Maharlika, it is too early, I think, at this point. We will have to really discuss the details,” he said in a forum last week.