CIF allocates $500 million for Philippine’s coal transition plan

MANILA, Philippines — The country’s multimillion-dollar transition to clean energy has received a significant boost following an endorsement from the Climate Investment Funds (CIF), a multilateral climate fund.

The CIF has endorsed the Philippines’ Accelerating Coal Transition (ACT) investment plan that seeks to retire up to 900 megawatts of existing coal generation capacity by 2027.

To help the country achieve this target, the multilateral climate fund would provide $475 million in loans and $25 million in grants.

Together with investments from the Asian Development Bank, the World Bank Group and the public and private sectors, the CIF said the total co-financing would exceed $2.3 billion.

The funding is part of a $2.2-billion ACT investment program, a multilateral investment platform utilizing concessional finance in key middle-income countries, the CIF said.

CIF CEO Tariye Gbadegesin said the endorsement marked a major step in the Philippines’ “journey away from coal and toward a clean energy future.”

“The (CIF’s) concessional resources will help ensure private sector buy-in, increased renewable energy development, and a just transition, for the benefit of the Filipino people and our planet,” she added.

As part of the plan, the Philippines intends to utilize the climate fund’s resources to facilitate the early retirement or repurposing of the Mindanao plant and other privately owned coal-fired facilities.

The CIF funding is also expected to bankroll initiatives to increase the country’s renewable energy capacity by 1,500 MW in the next six years.

Currently, RE accounts for 22 percent of the country’s total energy generation. The government wants to grow the RE share to 35 percent by 2030 and 50 percent by 2050.

CIF said the ACT investment plan would also help in decarbonizing the private sector, which was said to have produced around 90 percent of national energy capacity.

World Bank country director Ndiame Diop commended the Philippines’ commitment to the clean energy transition.

“The World Bank looks forward to supporting the government’s efforts to establish the enabling policy and regulatory environment and scale up investments for a just, sustainable energy transition,” he said.

In 2022, coal accounted for 44 percent of total installed capacity and 60 percent of total generation in the Philippines, emitting over 55 percent of the country’s greenhouse gas emissions.