The Philippines is starting to bet big on offshore wind, with new government policies and auctions aimed at turning its vast marine wind resources into real projects. A World Bank study released in 2022 estimated that the country has over 178 gigawatts (GW) of technical offshore wind potential, and this finding has helped anchor the government’s push to fast‑track offshore wind development.
As of early this year, the country’s energy department has already awarded more than 90 offshore wind service contracts totaling around 68 to 69 GWs, which indicates a large pipeline of potential participants under the government’s fifth Green Energy Auction (GEA-5) programme, its first auction dedicated to offshore wind.
The auction is offering 3,300 megawatts (MW) of fixed‑bottom offshore wind capacity, considered a landmark opportunity, even as the technology remains capital‑intensive. Fixed‑bottom projects, where turbines sit on foundations rigidly fixed to the seabed, can cost around US$3.5 to US$4 million per MW, based on a study by the Asian Development Bank (ADB).
This raises tough questions about who bears the risk, how financing is structured, and what it will take to make projects bankable without overburdening consumers.
In this episode of the Eco-Business Podcast, we speak with Ann Margret Francisco, Asia Pacific Director at Belgium-headquartered trade association Global Wind Energy Council (GWEC), where she unpacks how government, multilaterals, and financial institutions can step in to de‑risk projects through smarter regulation, planning and funding tools; the role of developers in engaging coastal communities early and meaningfully; and what safeguards are needed to protect marine ecosystems and secure local livelihoods.
Ann Margret Francisco, Asia Pacific Director, Global Wind Energy Council (GWEC). Image: ADB
Tune in as we talk about:
- What drove offshore wind development in the Philippines
- Why regulators put additional hurdles for developers at the fifth Green Energy Auction (GEA-5)
- Why a loan facility should be put in place for offshore wind despite high investor interest
- How the Philippines can maximise its Asean chairship by tapping into offshore wind
- How scaling offshore wind can go hand in hand with community engagement
The Philippines has set its sights on offshore wind based on the immense potential of the renewable energy resource initially presented in a World Bank report. Is this finding the main driver of the country’s offshore wind ambition?
Even before this study was published, I knew of at least one local developer who was already looking into offshore wind. At that time, the Department of Energy (DOE) only had frameworks for onshore wind and ocean technology, but not offshore wind.
The opportunities presented were coming from the private sector, amplified by all the technical assistance provided by World Bank. But the push is really rooted in the Philippines’ urgent need for energy security and transition. Even before the World Bank study, there was already an ambition by the DOE to meet 35 per cent share of renewable energy by 2030, and 50 per cent by 2040.
It only made sense [for investors and the government] to harp on this advantage when they learned about the [offshore wind] opportunity, given the heavy reliance on coal and fuel, alongside the growing electricity demand for this country.
Can offshore wind survive in a typhone-prone country like the Philippines?
My answer would be yes. I’ve seen offshore wind being pushed or implemented in other markets that would have extreme weather conditions as well.
For example, Japan and Taiwan, which is just north of the Philippines, are both deploying typhoon-resilient turbines. There are new innovations, advances in turbine and foundation design and engineering as well. All of these combined have significantly improved the survival of turbines infrastructure under high wind speeds and wave.
The key here is for the manufacturers and developers and those that would construct the projects to adopt global standards to local conditions, ensuring that the design reflect the profile of your country. In this case, the Philippines should not just be limited to typhoons but also earthquakes. Neighbours Taiwan and Japan which are typhoon and earthquake-prone are examples of those who have successfully done it.
The Philippines is pursuing its renewable energy targets in part through the fifth Green Energy Auction (GEA-5) programme. Can you assess how the progress has been since it was launched in in November 2025?
The Energy Regulatory Commission released the offshore wind ceiling price last February, which opened up the timeline for the developers to submit or register for the offshore wind auction.
Most of those who have really been active in developing offshore wind projects in the Philippines have submitted their documents to the DOE, so it means that there’s now a strong signal for participation for the first offshore wind auction [in the Philippines].
GWEC, together with the local association Wind Energy Developers Association of the Philippines Inc. (WEDAP), other key developers, along with multilateral banks, assembled ourselves into a technical working group or a coalition for us to understand what will make this auction successful.
With the context of offshore wind being very capital intensive and being a new technology, it means there will be several early stage risks.These risks are then tied to the ability of the developers to get project financing. Since we’re not doing any pilot project and going straight to competition in the auction, we wanted to at least look into the terms of reference.
We wanted to ensure that the government accepts quality projects or quality bids. We increased the hurdles for the developers to join. They need to prove that they are capable of delivering the projects because we don’t want a scenario where the DOE announces the winners, then two years down the line, th developers say they can’t construct it.
San Miguel Bay in Camarines Sur, Bicol is the site of the most advanced candidate to become the Philippines’ first operational offshore wind project. The planned 1 GW fixed-bottom wind farm is targeted to begin operations around 2028. Image: MarvinBikolano, CC BY-SA 4.0, via Wikipedia Commons
At the same time, we look at the performance bonds, to see how much the developer should pay in terms of guarantee [to complete the project in line with the contract].
We also look at the lender step‑in rights [that allow a lender to take control of a project if the borrower or project company is in default or failing to perform]. In the previous versions of the contracts of payment agreements between developers and the government, there has been no language on the lender step in rights, which will be an issue with the banks.
Looking at the risks tied to the developers, we need to ensure that the government will support building them. Otherwise, who will be accountable for this much needed infrastructure?
All of these conversations were really towards ensuring that risks are properly allocated, that developers understand what they need to commit to and how they will commit to their capacities. At the same time, the government tells them what they need to deliver the specific amount of gigawatts.
Can you walk us through how this blended finance can work together to de-risk investment and attract the scale of capital needed in the Philippines?
If local banks would see the participation coming from international banks that have financed offshore wind before like HSBC and Deutsch Bank, and even more so if they see the participation from the multilaterals like ADB, World Bank, AIIB, then two things happen.
One, multilaterals would be able to give lower cost of capital, so it is blended with how much the local banks are giving, resulting to lower interest rate and lower cost of capital. Eventually, the repayment would be lower so impact to cost would be apparent. Second, if the local banks see the participation of the multilaterals, then it’s an incentive for them to join as well. That scenario would bring more private capital at scale from both local and international banks.
It’s not just for the project development itself, but also for the ancillary infrastructure [or supporting structures of the primary project, such as access roads, utility connections, and storage units] and even supply chain. If more money will flow to investing on turbines or manufacturing that can then be put within the Philippines, there’s an opportunity to bring down the cost because then you don’t have to source it from other regions.
Is there a loan facility in place to de-risk offshore wind, like the one that’s just been implemented for geothermal? Do we see something similar happening for offshore wind in the Philippines?
That is our call to action, now that we understand the power of having concessionality, and having more participation in terms of capital stack [the layered mix of funding sources like equity and debt used to finance a project].
We’re willing to put up a facility that would be made available to the winners of green auction, or to the port investors, for example. To have that instrument is still a work in progress.
We’ve seen this for geothermal in other markets and regions for the wider re-deployment, because it’s very capital intensive. The risk assessment for an emerging market like the Philippines is so high.
Having this instrument will really bring down that cost of capital. Our commitment from GWEC is using the reports that we’ve published to send out the message to get more buy-in from governments, at least in the Philippines.
We want to get the agencies, the local banks, and the family foundations to participate in this kind of facility.
Some developers would be able to mobilise project financing with concessionality. Maybe some of them have already talked to the multilaterals who are very much willing to give them lower market rates.
I think individually in the project developer level, this kind of instrument or concession might be available, but in parallel, we also want to work on a sector-wide instrument.
Hopefully, if we cannot successfully deploy that before the end of auction five, then the hope is the next rounds we would have a mature enough instrument that the winners and the participants can have access to.
For the Asean power grid, the government has been quite vocal about tapping on offshore wind. How do you think the Philippines can maximise its chairship to be able to boost offshore wind technology?
If we anchor the Asean chairship to the APG, then it supports the call for a strengthened internal grid system. If the Philippines would connect to Brunei, then to Indonesia, Malaysia, and so on and so forth, it means that internally our system should be ready. It will not make sense for us to connect to another country without even understanding how we can make our own internal grid system robust first. Having a strong system would then support, not just offshore wind, but renewables per se.
Beyond APG, it makes sense for us to elevate the whole concept of regional cooperation. We want to extend that narrative and add the layer of regional collaboration or cooperation, using the lens of the supply chain, to make the wind value chain in this region more resilient.
There are potential industries in this region that could look into vessel sharing [where specialised ships and craft designed to install, operate, and maintain offshore wind turbines and infrastructure are shared], sharing of ports, hubs for workforce training. It’s using the concept of that cross border collaboration, but then extending it to the wider value chain.
If you had to highlight concrete actions that governments, development finance institutions, and private investors should take now to help the Philippines lead on offshore wind within Asean, what would those be?
I think the government has done an excellent job already with all the policies that they’ve they’ve introduced. They opened the market to foreign investment a hundred percent.
Offshore wind has its own executive order (EO 21), [which establishes the policy and administrative framework to accelerate offshore wind projects in the country], which is the whole of government approach that really allowed DOE to work with all the relevant agencies to “fast track” the development of offshore wind.
We also have the auction.The DOE has worked with the industry to make the auction bankable for the developers to participate in that auction framework. We’ve seen the government really doing excellent stuff to support the developers.
What the government can do to ensure that there’s momentum is to echo the call for the development finance institutions and multilaterals to make available a finance instrument to unlock funding for the sector, the developers, the supply chain and also for infrastructure investment.
Secondly, there should be a way for us to send the message out to the private investors outside the Philippines or maybe even inside the Philippines to let them know that we’re open for business and we have much participation from project developers. They would definitely. move ahead with project development, but we need private sector to also look at port and grid investment and supply chain.
Third, I mentioned the whole streamline permitting. We’ve seen the DOE publish a guideline for offshore wind, but it’s limited to the national agencies.
We need to ensure that the local government units would also comply to this streamlined permitting because when projects start construction and development on the local government, there’s a different universe of permits that you need to get. There’s really value in streamlining that as well.
If there’s a way for the local government to be fully captured in the national government’s online Energy Virtual One-Stop Shop (EVOSS) System [that provides a single decision-making portal for applications for permits] or have their own one-stop shops to support an efficient permitting and streamlining for the developers, that will be a really good improvement.
Connected to that would be marine spatial planning that the government is working on in order to integrate all the other users of the marine space like the fisheries and other infrastructure. There should be an understanding of where developers can develop and what would be the action plan if they’re operating very near a protected area
It would be a useful tool to integrate community and for the developers to ensure that there are environmental safeguards in place and that they are followed.
Renewable energy siting is emerging as a major concern in the Philippines, with cases like displacement from fishing grounds and small fishers’ loss of access without clear compensation. From your perspective, how should governments and developers balance the urgent need to scale wind and other renewables with the equally important imperatives of biodiversity protection, local community rights, and social license to operate?
Scaling offshore wind should go hand in hand with inclusive planning. We launched a report is about social economic benefits of offshore wind, but we extended that report to how we ensure that the benefits reach the communities.
Inclusive planning is key and being transparent with how the developers would use the same space, where the communities are operating at will be very helpful in planning. Governments and developers need to ensure clear benefit sharing mechanism, compensation frameworks for the affected communities.
But when we talk about benefits, it must go beyond this. It’s really about ensuring that the communities are involved in the development and understanding the needs of the community or the stakeholders so that when the developers plan their project, then they have a clear understanding of how they can coexist with the community. The way we are saying this, and the way we are pushing this narrative is the only way that developers can build their projects is when they build the social license with the community.
It should be included in the whole development and part of the development ethos that will be central to project success and the sustainability of the project. That’s why we’re pushing for transparent marine spatial planning.
We are using our platform to ensure that yes, we sort of represent the developers and the wider value chain or supply chain for wind, but also we are very much connected to the civil society organisations in the community.
There is a case study in the United Kingdom where in developers can coexist with the fisherfolks in the communities because they saw how offshore wind regenerated fish in their area.
We’ve seen this in other markets and our hope is through those best practices can be brought here, there is a way for us to move forward together.
