Equity cap on energy projects anti-investor

Foreign businessmen said that limiting foreign equity share in renewable-energy projects in the country to a maximum of only 40 percent would “dampen” the interest of potential foreign investors.

“There is substantial international interest to participate in the development of the renewable-energy sector in the Philippines, especially after the enactment of the Renewable Energy Act [Republic Act 9513],” the Joint Foreign Chambers of the Philippines said in a letter to Energy Secretary Angelo Reyes dated August 25, 2009.

Republic Act 9513, or the Renewable Energy Act of 2008, became law in December 2008 and its Implementing Rules and Regulations (IRRs) were signed in May this year.

Upon review of the law and its implementing and guidelines, however, the chambers said that they “are disappointed to see that foreign equity participation in the generation of wind, solar and ocean energy is limited to 40 percent under Rule 6, Section 19, although there is no such limitation contained in the law itself.”

“There is no doubt that this limitation will substantially dampen the interest of foreign investors in undertaking renewable-energy projects in the Philippines, despite the generous fiscal and other incentives contained in the law,” the foreign chambers added.

Review requested

“We believe that the interpretation of natural resources and treatment of wind, solar and ocean energy sources should be reviewed. The interpretation in the IRRs and the Guidelines of Article XII, Section 2, of the Constitution to include such sources will gravely limit the availment of capital for investment which is the very policy intention of R.A. 9513,” the chambers added.

The Joint Foreign Chambers asked for a dialogue with officials of the Department of Energy on such interpretation.

The letter to Reyes was signed by the presidents of the foreign chambers: Austen Chamberlain of the American Chamber of Commerce of the Philippines Inc., Richard Barclay of the Australian-New Zealand Chamber of Commerce of the Philippines Inc., Richard Mills of the Canadian Chamber of Commerce of the Philippines Inc., Hubert D’Aboville of the European Chamber of Commerce of the Philippines Inc., Yasuhiko Arimitsu of the Japanese Chamber of Commerce and Industry of the Philippines Inc., Eun Gap Chang of the Korean Chamber of Commerce of the Philippines Inc. and Shameem Qurashi of the Philippine Association of Multinational Companies Regional Headquarters Inc. –Ben Arnold O De Vera, Reporter, Manila Times