The Philippines will invite proposals from geothermal firms in the fourth quarter of 2025 to participate in a program designed to reduce the financial risk of exploration, the Department of Energy (DOE) said Wednesday.
The Philippine Geothermal Resource Derisking Facility will address one of the biggest barriers to geothermal development: the high cost and risk of early-stage exploration, Undersecretary Rowena Guevara said in a conference in Makati City.
“Unlike other renewables, geothermal requires significant upfront investment before confirming resource viability, which often discourages private sector participation,” Guevara said at the 6th Philippine International Geothermal Conference.
The facility, with an estimated budget of up to $250 million, will provide cost-shared exploration support. It will cover up to 50 percent of drilling costs through convertible loans that are converted to grants if a drilling fails. The approach is intended to reduce the financial risk for developers and encourage investment in new sites.
Jaime Austria, president of the National Geothermal Association of the Philippines (NGAP), said the facility would give incentives for companies to drill in new areas and find more resources.
“This is very much aligned to the Philippines’ goal to increase its generating capacity, geothermal generating capacity, by de-risking the geothermal development process,” said Austria, who is also an assistant vice president at Energy Development Corp.
Guevara said the Philippines ranks third globally in installed geothermal capacity but faces persistent challenges, including high upfront costs, resource uncertainties, and complex permitting processes.
The facility, which is expected to boost geothermal investments, is scheduled to be implemented from 2026 to 2031. The program is expected to commence in the second half of 2026.
“This facility is not just about financing—it’s about accelerating geothermal development, strengthening energy security and driving inclusive growth,” Guevara said.
Guevara said geothermal power has an installed capacity of 2,004 megawatts (MW), with another 1,031 MW of potential capacity.
“In the PEP Reference Scenario, geothermal installed capacity should have been at 2,190 MW by this year and is projected to reach 3,310 MW by 2050,” she said, referring to the Philippine Energy Plan.
She said the growth reflects geothermal energy’s unique advantage as a stable, reliable and 24/7 baseload renewable energy source.
The DOE is also considering two geothermal Pre-Determined Areas (PDAs) to be offered to investors under an Open and Competitive Selection Process (OCSP), with bidding targeted for December 2025.
The DOE is promoting direct-use geothermal applications for low-enthalpy resources, which can be used for heating, agriculture and industrial processes.
“By addressing these barriers through policy reforms, investment incentives, and innovative programs, the Philippines can unlock the full potential of geothermal energy, powering our economy, creating jobs, and advancing our clean energy transition,” Guevara said.
