Key Impact Points:
- Major Investment: Climate Investment Funds (CIF) endorses a $500 million plan for the Philippines to transition from coal to renewable energy.
- Significant Emissions Reduction: The plan aims to reduce 33 million tons of CO2 emissions by 2030 and add 1,500 MW of renewable energy capacity.
- Just Transition Focus: Ensures 80% of affected coal sector employees gain access to sustainable income.
- Broad Support: Funding includes $475 million in loans and $25 million in grants, with co-financing expected to exceed $2.3 billion from multiple stakeholders.
Accelerating the Transition from Coal
The governing board of the Climate Investment Funds (CIF), a leading multilateral climate fund, has endorsed a new investment plan presented by the Government of the Philippines. This plan allocates $500 million for the country’s transition from coal to renewable energy, focusing on early retirement or repurposing of coal-fired plants, including the Mindanao plant.
Goals and Impact
The Philippines’ Accelerating Coal Transition (ACT) investment plan will use CIF’s concessional resources to facilitate the retirement of up to 900 MW of coal generation capacity by 2027. In addition, it aims to add 1,500 MW of renewable energy capacity by 2030, incorporating technologies like battery systems, offshore wind, floating solar, and pumped hydro projects. This initiative is expected to deliver a reduction of 33 million tons of CO2 emissions by 2030.
Commitment to a Just Transition
A key component of the plan is ensuring a just transition for coal sector employees, with 80% projected to gain access to sustainable income. This aligns with the Philippines’ commitment to its Nationally Determined Contribution (NDC), aiming for a 75% reduction in GHG emissions by 2030.
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Tariye Gbadegesin, CEO of Climate Investment Funds, remarked:
“This endorsement represents a major achievement in the Philippines’ journey away from coal and towards a clean energy future. I congratulate all our partners, notably the Government of the Philippines, Asian Development Bank, and the World Bank Group. The Climate Investment Funds’ concessional resources will help ensure private sector buy-in, increased renewable energy development, and a just transition, for the benefit of the Filipino people and our planet.”
Financial Support and Partnerships
CIF will provide $475 million in loans and $25 million in grants, with total co-financing expected to exceed $2.3 billion from the Asian Development Bank, the World Bank Group, and other public and private sector investors. This funding is part of CIF’s $2.2 billion Accelerating Coal Transition investment program, a pioneering platform to transition away from coal in key middle-income countries.
Scott Morris, Vice President for East Asia, Southeast Asia, and the Pacific at the Asian Development Bank, stated:
“Innovative approaches and greater public and private investment are required to accelerate the energy transition in Asia and the Pacific. As the region’s climate bank, ADB welcomes the Climate Investment Funds’ support for the Philippines to move away from coal and towards clean, renewable energy. This financing is instrumental in enabling ADB’s Energy Transition Mechanism (ETM) to help incentivize the early retirement and repurposing of coal plants and deployment of clean energy in the country in a just manner. Together with the International Finance Corporation and the World Bank, we are committed to supporting the Philippines in achieving a just and inclusive energy transition that is a win for communities, the environment, and the economy.”
Future Outlook
Jean-Marc Arbogast, Country Manager for the Philippines at IFC, added:
“The CIF ACT Investment Plan offers a blueprint for a clean energy future which can help unlock private sector financing to support the country’s energy transition. IFC remains committed in working with partners towards a green and inclusive growth for the Philippines.”
Ndiame Diop, Country Director for Brunei, Malaysia, Philippines, and Thailand at the World Bank, commented:
“The Philippines government’s commitment to energy transition through the CIF ACT Investment plan is commendable. The World Bank looks forward to supporting the government’s efforts to establish the enabling policy and regulatory environment and scale up investments for a just, sustainable energy transition.”
The ACT investment plan is a significant step forward in the Philippines’ energy transition, setting a precedent for other nations aiming to achieve similar goals.
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