World Bank approves $1.02-B loan for Philippine energy transition, water security
The World Bank agreed $1.02-billion in support loans Philippine reforms aimed at accelerating the deployment of clean energy, strengthening electricity markets, and improving water managementmind.
In a statement on Monday, the World Bank said it approved the Second Energy Transition and Climate Resilience Development Policy Loan (DPL) last week to help deal with high and volatile electricity costs in the country.
The DPL includes a $1-billion loan from the World Bank for Reconstruction and Development (IBRD) and a $20-million performance-based grant from the Livable Planet Fund.
“(This) is among the major activities of the IBRD the World Bank Group mandated to support the development agenda of the Philippines,” said the multilateral bank, adding that this was developed in consultation with the relevant government agencies, the private sector, utilities, consumer groups, civil society, and local government units.
“By reducing dependence on imported fuels and accelerating the deployment of domestic energy solutions, DPL will help protect the Philippines from global price shocks and put the country on a secure and affordable energy path,” the bank said.
The Philippines exports most of its energy needs, making it highly vulnerable to fluctuations in global crude prices.
Rising fuel costs stemming from the Middle East conflict have forced the government to place the country under a state of emergency until March 2027.
The Director of the World Bank Division in the Philippines, Malaysia and Brunei Zafer Mustafaoğlu said that these changes will allow the country to cooperate with its abun.renewable energy resources.
“This operation helps turn those natural benefits into reliable, affordable electricity for Filipinos families and businesses,” he said.
“At a time when energy markets around the world are very volatile, this DPL it helps the Philippines take control of its energy future, support growth, and create jobs,” he added.
Finance Secretary Frederick D. Go said the World Bank’s approval of DPL will help make reliable electricity and water services in the country more affordable.
“The programs we are implementing are designed to reduce the country’s dependence on imported fuel, strengthen electricity security, and increase access to sustainable water systems,” he said. BusinessWorld.
“This will ultimately lead to lower electricity costs, improved essential services, quality jobs, and climate-resilient communities,” he added.
DPL will support reforms including the full operation of the renewable energy market and the integration of electric vehicle charging into utility systems.
Funding will also support nationals firstin the offshore wind auction, which targets 3.3 gigawatts of contracted capacity by 2030 and is expected to attract nearly $7 billion in private investment.
The Philippines remains heavily dependent on fossil fuels, with renewables accounting for only 25% of the energy mix by the end of 2025. Under the Philippine Energy Plan, the government aims to increase this share to 35% by 2030.
With the loan, the World Bank said, “the share of installed renewable energy is targeted to increase from 30% to 42%, helping to integrate the country’s energy mix and reduce its exposure the price shock of imported fuel.”
The financial institution, designed to mobilize private capital at scale, is based on the Philippine National Development Plan 2023-2028 and AmBisyon Natin 2040.
“In addition to capacity, it also addresses long-standing challenges in the water sector, where more than 1,600 local government agencies are responsible for providing services but often lack the funds and institutional capacity to do so reliably,” he said.
DPL will also support cost-recovery tax structures, an integrated financial framework that prioritizes poor and climate-vulnerable communities, and multi-water pricing regulations that are expected to increase local water suppliers with sustainable business plans from 10 to 100 by 2027. Justine Irish D. Tabile
