The Philippines’ proposed $250-million Geothermal De-risking Facility, a partnership with the Asian Development Bank (ADB) and the Land Bank of the Philippines, has sparked investor interest in the country’s stagnant, high-risk geothermal industry.
ADB’s country director for the Philippines Pavit Ramachandran told a briefing at the Asia Clean Energy Forum 2025 that high exploration costs and accompanying risks were key challenges for geothermal development.
“We are working with [the Department of Energy] (DOE), but also with the energy sectors and local financing institutions to see what structure would be fit for purpose and can really have a catalytic effect in terms of increasing geothermal,” Ramachandran said.
He said baseload capacity would be needed to supplement future large-scale solar and offshore wind farms.
“Even now that the Philippines announced that it’s working on the de-risking strategy, we can see increased interest already in investors who’re looking into exploration, and that’s very positive,” he said.
DOE Undersecretary Rowena Guevara echoed concerns about high exploration risks hindering geothermal development, despite its significant potential.
“No new fields have been developed since the privatization of the government’s geothermal exploration arm,” Guevara said.
“We aim to change that through a Geothermal De-risking Facility, developed in partnership with the ADB and the Land Bank of the Philippines. This facility is now in the final stages of approval,” she said.
Guevara expects the facility to be available to investors by 2026.
The facility is anticipated to help unlock the country’s estimated 4,000 megawatts of untapped geothermal potential, aiming to regain its position as the world’s largest geothermal producer. The Philippines is currently the third-largest producer, behind Indonesia and the United States.
Initial exploration costs for a geothermal well range from P1.5 billion to P2 billion. The proposed facility will share exploration drilling costs with qualifying private developers to de-risk geothermal resources at the pre-development stage. The DOE will arrange funding to capitalize the facility with ADB as its anchor partner.
