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Biomass now open to 100% foreign stake

FOREIGN companies can now fully own and operate biomass power plants in the Philippines under a recently signed policy from the Department of Energy (DoE).

The DoE’s newly-released omnibus guidelines for the award and administration of renewable energy (RE) contracts is intended for fast-tracking the development of RE sources such as solar, wind, hydro, biomass, geothermal and ocean energy, including hybrid systems. It also eliminates hindrances in harnessing RE sources such as application and permitting processes.

One of the salient features of the omnibus guidelines include fast-tracking the application process and making the implementation of RE projects more rigid.


The RE applicant must be a Filipino or, if a corporation, must be a Filipino corporation with at least 60 percent of its capital owned by Filipinos and duly registered with the Securities and Exchange Commission (SEC), except for biomass and waste-to-energy technology.

In particular, the circular allows 100-percent foreign ownership in biomass plants — foreign firms no longer need to tap a Filipino partner to construct such facilities.

“The reason is it was opined that biomass is not actually a natural resource. You’re not [supposed] to explore. There’s no exploration stage,” said Marissa Cerezo, assistant director of the DoE’s Renewable Energy Management Bureau.

Developers themselves made that clarification, specifically for waste-to-energy technology that does not involve exploration of natural resources, according to National Renewable Energy Board Chairman Monalisa Dimalanta.

“I think that’s an indication that it will also unlock more interest or will realize more interest in the sector because they were the ones… the request came from that sector itself,” Dimalanta said.

“We don’t have the local technology on biomass yet, so with this policy opening up to foreign companies, we believe that a lot more foreign companies will engage into biomass development or waste-to-energy development,” Cerezo said.

Lack of feedstock, usually one of the challenges faced by those venturing into renewables, will be addressed through the policy.

“For the feedstock, we also have models for them to address it like making the feedstock supplier as part-owner of the power plants,” Energy Undersecretary Felix William Fuentebella told reporters last Tuesday.

Aside from that, the guidelines also convert the contract from pre-development to development stage.

Instead, the Energy department will monitor the firms’ compliance with their work program and technical requirements.

Another selling point of the circular is the department will do away with the blocking system of subdividing the Philippine territory into blocks of 30 seconds of latitude and 30 seconds of longitude. One RE block is equivalent to an area of 81 hectares with a designated block number in identifying the coverage of a contract area.

“What does that mean? For as long as you get a possessory right on top of a rooftop or in a water area or in a hydro facility, you have the possessory right, build it. You don’t have to own it. If you have a lease agreement for 25 years, then you can build it already,” Fuentebella explained.

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