Solar Philippines urged the Asian Development Bank to take the lead and finance merchant solar power plants to spur market competition and reduce power costs.
“Merchant solar power plants are a very viable investment in the Philippines, considering that WESM (Wholesale Electricity Spot Market) prices are around P5 per kilowatt-hour and our contract prices are P3 per kwh. We can actually sell at a higher price if we are selling to the spot market,” Solar Philippines president Leandro Leviste said.
Merchant power plants are those without power supply contracts with utilities while WESM acts as the country’s trading floor of electricity.
“But because local banks are not used to financing merchant projects… have not been able to get those off the ground. So if any development bank can finance the first solar merchant power plants in the Philippines, we believe that that will persuade other financial institutions to follow and perhaps, at that point, the politics of signing bilateral contracts in the Philippines would become irrelevant,” Leviste said.