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Infrastructure & PPPs in Philippines - Q4 2023 Update

PHILIPPINES is undertaking multiple reforms to boost PPPs and private sector investments in infrastructure sector - including major project pipelines and investment plans notified by various government agencies - NEDA, BOI and PPP Centre. Focus sectors for development using private sector participation are primarily clean energy and transport sectors.

Read more about key developments in Infrastructure and PPPs in Philippines in our country insight.

 

October 2023 

FIRMS TO DEVELOP HYDROGEN AND NUCLEAR POWER ALTERNATIVES IN THE PHILIPPINES 

Australia-based Southern Infrastructure Private Limited and Kaizen ANZ Private Limited are planning to build and operate a thorium-fueled reactor in the Philippines as an alternative to hydrogen and nuclear power. In line with this, the partners have signed a public-private partnership (PPP) agreement with the Government of the Philippines to support the development. 

The 40 MW Thorium fueled simple-high-temperature gas-cooled reactor (STGR20 (V)) will deliver a safe, sustainable, and green base load energy. Additionally, the system will produce green hydrogen for transport, desalinated water and gamma radiation as by-products for long-term storage of food products. The project will commence in mid-2024 and is expected to be completed by 2027.

 

NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY CLEARS USD 4.7 BN INFRA PROJECTS 

The National Economic and Development Authority (NEDA) has approved infrastructure schemes and projects totaling PHP 269.7 Bn (USD 4.7 Bn). NEDA’s board cleared

  • The upgrade, expansion, operations and maintenance of the Bohol-Panglao International Airport,

  • Dialysis Center Project of the Baguio General Hospital and Medical Center in the public-private partnership mode, with a project cost of PHP 392 Mn (USD 7 Mn) 

  • PHP 13 Bn (USD 233 Mn) Infrastructure Preparation and Innovation Facility–Second Additional Financing, which will provide the Department of Transportation and the Department of Public Works and Highways with an improved mode for financing and conducting project preparation activities.

  • Green economy program, to be funded through a PHP 3.6 Bn (USD 64.5 Mn) grant from the European Union.

 

PHILIPPINES CONSIDERS REMOVING PRICE CEILING IN GREEN ENERGY AUCTION 

The Philippines’ Energy Regulatory Commission (ERC) is exploring the possibility of holding its next round of green energy auction without setting a reserve price. The commission and the Department of Energy are holding discussions with potential investors for feedback. The prices set by the ERC were primarily responsible for a weak turnout at the Green Energy Auction 2 or GEA-2 conducted in July 2023.

 

TOTALENERGIES ENEOS TO DEVELOP PHILIPPINES' LARGEST ROOFTOP SOLAR SYSTEM 

Singapore-based Total Energies ENEOS (TE) has partnered with the Real Steel Corporation (RSC) to invest in the Philippines ‘largest rooftop solar system. The system will have a peak capacity of 16.8 MW and will be located at the RSC's manufacturing facility in Pampanga province. The two firms signed an agreement for TE to develop and maintain the system for 10 years while RSC will own the asset for 30-years.

 

PHILIPPINES PROVINCE TO ADD 1.5 GW SOLAR CAPACITY BY 2025 

The Provincial Government of Pangasinan has announced plans to develop around 1.5 GW of solar power facilities by 2025 across the province in the Philippines. The facilities will be constructed by 4 renewable energy (RE) companies namely Sinocalan Solar Power Corporation, Renovable Earth Corporation, PV Sinag Power Incorporation, and 3 Barracuda Energy Corporation.  Approvals and contracts have also been awarded to develop each of the RE projects, with capacity ranging from 60 MW to 650 MW solar projects.

 

November 2023 

PHILIPPINES BACKING 3 MORE TRANSPORT PROJECTS 

The Philippines’ Public-Private Partnership (PPP) Center is backing more transport projects through its Project Development and Monitoring Facility (PDMF) - a revolving fund that was established to enhance the investment environment for PPPs.

The Department of Transportation's funding application has been approved to provide

  • Transaction advisory services for the unsolicited proposals (USPs) for regional airports- The USPs for regional airports include the upgrade, expansion, and O&M of the Bohol-Panglao, Laguindingan, and Bicol International Airports.

  • The Air Traffic Services (ATS) – Air Navigation Services (ANS) project - The ATS-ANS Project involves the proposed financing, design, construction, modernization, upgrading, and O&M of air traffic services and air navigation services facilities, and

  • The rehabilitation, expansion, operations, and maintenance (O&M) of the Light Rail Line 2 (LRT 2).

The PDMF Committee has approved transaction advisory support for the proposed rehabilitation and O&M of the LRT2 project, which shall also explore possible expansion of the system by 3 kilometres and the addition of 3 station to the west and to the east.

 

PHILIPPINES INVITES BIDS FOR USD 421.5 MN HIGHWAY EXTENSION PROJECT

The Philippines’ Department of Public Works and Highways (DPWH) is inviting comparative bids for a PHP 23.4 Bn (USD 421.5 Mn) highway extension project after accepting an unsolicited proposal from original proponent San Miguel Holdings. The project, included in the government’s ‘Infrastructure Flagship Program’, is a four-lane, 59.4 km toll expressway starting from Rosario to San Juan in the province of La Union.

The DPWH is inviting local and international companies to submit proposals under a comparative bidding process to finance, design, construct, operate, and maintain the highway under a 34-year concession period.


PHILIPPINES SEEKS INVESTORS FOR RIZAL PARK REDEVELOPMENT PPP 

The Philippine government is inviting interested companies to develop a part of Rizal Park via a public-private partnership (PPP). The PPP Center and the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) will be holding an investors’ conference to engage private sector partners for the Rizal Park Western Section Development Project. 

The project involves financing, design, improvement, construction, and operation and maintenance of park facilities and attractions in the western section of Rizal Park Complex. The investor’s conference aims to gauge the interest of the private sector to partner with the TIEZA for undertaking the project as a PPP; and understand key considerations of the private sector regarding their potential involvement in the project in partnership with the TIEZA; among others.

 

PHILIPPINES TALKS UP REFORMS TO PPP CODE 

The Philippines’ Public-Private Partnership (PPP) Center has highlighted significant reforms of the proposed PPP code. The planned code will consolidate all legal frameworks and create a unified system to further enhance private sector participation. It will also address the fragmented legal frameworks for PPPs. 

Some of the key reforms include the updating of project approval thresholds for build-operate-transfer projects, while allowing the NEDA Investment Coordination Committee to review, evaluate, and update these threshold amounts. Another reform would be to uphold and retain local autonomy while providing mechanisms to ensure harmonized investment programming between local government units and the national government. Unsolicited proposals are allowed in the list of PPP projects even without the new concept or technology requirement.

 

PHILIPPINES’ BOI APPROVES USD 6 BN WORTH OF INFRASTRUCTURE PROJECTS 

The Philippines’ Board of Investment (BOI) has approved 16 key infrastructure investment projects worth PHP 336.3 Bn (USD 6 Bn) for green lane processing. Of the total, around 11 are renewable energy (RE) projects, with a focus on solar and wind energy. 

Some of the key projects approved include

  • SunAsia Energy Incorporation’s PHP 66 Bn (USD 1.18 Bn),

  • Floating solar project in Laguna de Bay (1,300 MW),

  • NKS Solar One Incorporation’s PHP 14.9 Bn (USD 267 Mn),

  • floating solar project in Caliraya (250 MW), and

  • Laguna Wind Energy Corporation’s PHP 10.85 Bn (USD 194 Mn) Kalayaan 2 wind power project. 

Furthermore, the BOI has greenlit two telecommunication tower infrastructure projects including EdgePoint Towers Incorporation’s PHP 50 Bn (USD 895 Mn) common passive telecommunications tower infrastructure project. These approvals are part of the Government of the Philippines’ green lanes initiative launched in July 2023, aimed at facilitating strategic investments by streamlining regulatory processes across multiple agencies. It is expected to increase the ease of doing business in the country and promote economic growth.

 

December 2023 

PHILIPPINES APPROVES USD 4 MN WATER SUPPLY PPP 

The Philippines’ Public-Private Partnership (PPP) Center and the Municipality of Baggao have signed a joint venture agreement for a PHP 210 Mn (USD 3.79 Mn) water supply project. The project – which entails the design, finance, construction, operation, and maintenance of a water supply service for 24 administrative units of the Baggao town – was awarded to Quezon City-headquartered M.E. Sicat Construction. 

It shall have a 25-year term and is scheduled to be implemented at the beginning of 2024. The PPP Center provided technical assistance in updating the business case study, guidance during the approval stage, and close coordination with the local government unit’s joint venture selection committee at the procurement stage.

 

PHILIPPINES SOVEREIGN WEALTH FUND PLANS PPP INVESTMENTS 

The Philippines' Maharlika Investment Corporation (MIC) is planning to invest in public-private partnership (PPP) projects. The fund also intends to serve as a co-grantor for projects experiencing delays. Under the flagship Build Better More program, the government will invest in 197 infrastructure projects worth about PHP 8.7 Trn (USD 156 Bn). About 41 of these flagship projects will be PPPs. There are 109 projects in the pipeline to be implemented as PPPs, estimated to cost PHP 2.4 Trn (USD 43 Bn).

 

GURĪN ENERGY TO DEVELOP USD 60 MN SOLAR FARM IN THE PHILIPPINES 

Singapore-based Gurīn Energy will develop its 75 MW solar farm in Palauig, Philippines at an investment of USD 60 Mn. The farm will span 80 hectares in area and will integrate 136,363 ground-mounted and solar photovoltaic (PV) panels. Construction works are expected to commence by Q3 2024.  The project is jointly financed by the Union Bank of the Philippines and various national, provincial, and municipal authorities. 

The farm aims to provide clean, zero-emission electricity and will power more than 35,500 homes annually. Additionally, it will eliminate 53,100 metric tons of carbon emissions annually and remove 11,500 combustion-engine cars from the roads annually.

 

PHILIPPINE PROVINCE TO INVITE BIDS FOR USD 21.7 MN WATER PPP 

The provincial government of Negros Occidental in the Philippines will invite bids for a PHP 1.2 Bn (USD 21.7 Mn) water project in the first quarter of 2024.  The provincial government completed a study in June 2023 - in partnership with the Asian Development Bank, USAID and the Philippines’ Public-Private Partnership (PPP) Center - for the planned bulk water supply PPP. 

The Negros Occidental administration is looking for a private partner with whom it will set up a project vehicle and in which it will invest PHP 100 Mn (USD 1.79 Mn). Manila Water Company, Aboitiz InfraCapital, San Miguel, Genesis Water Technologies Philippines and Suez Water Technologies have expressed interest.  

 

List of key transactions - Philippines Q4 2023



Source: YOG INFRA analysis, Public Information

 

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