Can renewable energy capital overcome execution gaps?

5 Lessons Learned from Can Renewable Energy Capital Overcome Execution Gaps?

The Philippines has emerged as a prime destination for renewable energy (RE) investment in the Asia-Pacific region. At Energyear Philippines 2026, I moderated a panel discussion titled Unlocking Capital How Renewable Projects Attract Investment at Scale. The session featured insights from developers, bankers, and trade-association leaders on the persistent execution gap preventing many projects from reaching financial close and construction.

The Philippines' attractive environment for RE investment is driven by favorable contracting programs and competitive tariffs. Matthew Carpio, transaction advisory head of Climate Smart Ventures, noted that the country has created a very conducive environment for RE project investments. Aljon Del Rosario of Index Partners described the market as a seller's market, with ample capital competing for too few bankable projects.

Local banks provide most project finance, offering competitive tenors and pricing, while foreign banks and equity investors participate selectively. ING's energy lead in the Philippines, Jennyvie Lopez, confirmed ample liquidity in the local bank market. However, Energy Industries Council's Syed Saggaf highlighted real hurdles to deal closure, citing low conversion rates from project pipeline to final investment decision.

Key Takeaways

1. Execution Over Capital The central obstacle is execution, not lack of funds. Developers face rising capital expenditures (capex), transmission constraints, and underestimated delivery risk.
2. Risk Appetite Varies Risk appetite varies by project stage and investor type. Early-stage ventures demand higher returns; late-stage or contracted assets attract lower-return capital as risk diminishes.
3. Sponsor Credibility Matters Sponsor credibility, scale, and pipeline visibility are critical. Large deals attract larger banks due to justified underwriting effort; small projects can be administratively costly relative to loan size.
4. Policy Support Isn't Enough Existing policy support cannot fully bridge the execution gap. Panelists highlighted supportive measures such as the Bangko Sentral's incentive for renewable lending and ING's Terra approach aligning lending with Paris Agreement goals. However, policy levers alone cannot solve technical or commercial risks.
5. Practical Fixes Needed What would change the calculus? Panelists recommended practical fixes expand and standardize de-risking mechanisms, strengthen developer capacity in project planning and procurement, promote blended-finance vehicles, and improve transparency around transmission planning and costs.

Conclusion

The Philippines can keep attracting renewable capital if investor certainty and developer delivery align. As Mark Dastas of SN Aboitiz Power noted, Capital wants to flow, but it must be matched with realistic delivery plans and appropriate financing instruments. Policymakers and market designers face a clear task turn policy promise and investor enthusiasm into practical mechanisms that move projects from bid to commissioning.

About the Author

Ludwig Federigan is the founder and chief strategic advisor of the Young Environmental Forum and a subject-matter expert at the Co-operative College of the Philippines. He completed a climate change and development course at the University of East Anglia (UK) and an executive program on sustainability leadership at Yale University (USA). You can email him at [email protected].

Keywords Renewable Energy, Capital, Execution Gaps, Philippines

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