Philippines Urged to Prioritize Careful Planning for Energy Transition, Says Rockefeller Foundation

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The Rockefeller Foundation suggests that international funders should adopt a new approach, focusing on meticulous planning by recipient countries over grand political declarations when scaling up clean energy initiatives. The Philippines, heavily reliant on coal for more than half of its electricity, requires immediate funding of US$9 billion for renewable energy expansion and may need up to US$165 billion by 2050. The nation aims to achieve a 50% renewable energy share in power generation by 2040.

According to a report released by the foundation, the Southeast Asian country could benefit from a Just Energy Transition Partnership (JETP), a funding initiative aiding developing nations’ transition to clean energy. The report emphasizes the importance of starting the energy transition process with technical negotiations led by the government to develop a nationally appropriate investment plan, rather than commencing with high-level political agreements. This shift in approach aims to avoid unrealistic expectations and misunderstandings, which have hindered progress in similar programs in other countries.

Since the inception of JETPs, challenges have emerged, including sweeping blackouts in South Africa, lack of government consultation in Vietnam, and concerns about lending terms in Indonesia. The Rockefeller Foundation underscores the need for philanthropic investment in launching a “country platform” in the Philippines, where policymakers and multilateral development banks collaborate to draft and stress-test investment plans before matching projects with investors.

Moreover, the foundation highlights the scarcity of donors, low concessional funding, and inconsistent roles for multilateral lenders as key hurdles in the JETP model. It recommends expanding the International Partners Group (IPG) to provide concessional finance and urges multilateral development banks to optimize existing resources while securing additional capital injection from member governments.

Despite growing interest from countries like Thailand, Mongolia, and Kazakhstan in receiving JETP funding, there’s a lack of clarity on how to process this interest effectively. The report calls for a joint announcement of interest from these nations to demonstrate significant demand for such deals.

To achieve net-zero emissions by 2050, global energy sector investments exceeding US$5 trillion annually are required, according to consultancy firm Deloitte. However, limited investments flow into developing nations due to credit rating disparities and protectionist policies. An international coalition recently proposed using carbon credits to finance the early closure of coal plants in the Philippines, reflecting ongoing efforts to transition to clean energy sources.