The thrust to create so-called “clean” energy projects is hampered by poor financial risk perception, need for big capital investments and policies that still favor conventional sources of energy, an official of the Asian Development Bank (ADB) recently announced.
Stating at the Asia Clean Energy Forum at the ADB headquarters this week, Private Sector Operations Department Director-General Philip Erquiaga said these three impediments are what the bank will take into consideration drafting a new energy policy.
Mr. Erquiaga explained the perception of risk is because of the view regarding clean energy technology is “experimental,” creating it financially risky as an investment.
Rizal Commercial Banking Corp. Senior Vice-President for financial markets Marcelo E. Ayes agreed, evaluating that “many of the companies producing this technology are start-up and will have difficulty accessing credit because they don’t have a track record.”
Noting further that these projects are “capital-intensive,” Mr. Ayes stated the “risk is huge without certain profit even in the long term.”
He said that a well-designed feasibility study and a guarantee by the government, ADB or the World Bank are few of the factors that could better risk perception.
Energy Assistant Secretary Mario C. Marasigan, chief of the Renewable Energy Bureau, stated the government has addressed the concern over policy drawbacks, citing Republic Act 9513, or the Renewable Energy Act of 2008, which provides fiscal and non-fiscal incentives for renewable energy investors, involving tax credits on domestic capital equipment and services, special tax rates on equipment and machinery, amidst others.
This will bring down the price of technology and make ‘clean,’ renewable energy competitive with conventional energy. The law is a clear indicator that this government prioritizes renewable energy.
Source : Energy Business Daily
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