Makati Business Club Pushes BOT Scheme to Attract Private Investment in Power Grid, Boost Electrification and Renewable Energy Goals

The Makati Business Club (MBC) has called on the national government to allow private investment in the country’s power grid infrastructure through a build-operate-transfer (BOT) scheme, amid growing concerns over the Philippines’ slow progress in electrification and renewable energy integration.

In a statement released Thursday, MBC stressed the urgency of policy reforms to ease long-standing transmission bottlenecks that hinder electricity access and the delivery of clean energy across the archipelago. As of June 2023, household electrification in the Philippines stood at 91.1%, according to data from the Department of Energy (DOE), which aims for full electrification by 2028.

Despite this target, MBC noted that the current pace of grid development is lagging behind the country’s energy needs, especially as renewable energy capacity continues to expand. Under the Philippine Energy Plan, the government is aiming for a 35% renewable energy share in the national energy mix by 2030 and 50% by 2040.

However, the lack of sufficient grid investment poses a major hurdle. The International Energy Agency (IEA) reported that since 2018, global renewable energy investments have consistently outpaced grid infrastructure spending by an average of $200 billion annually. This disparity widened further in 2023, with BMI Research, a Fitch Group unit, estimating a global funding shortfall of $328 billion for grid development.

MBC believes enabling third-party entities—including private firms and government-owned and controlled corporations—to build and operate transmission infrastructure can accelerate grid expansion, enhance transmission efficiency, and reduce long-term energy costs. The group emphasized that such initiatives are critical as the Philippines climbs the ranks of renewable energy investment destinations.

Apart from national transmission lines, MBC is also advocating for expanded public-private partnerships in off-grid electrification efforts. These solutions, the group said, are crucial to reaching underserved and remote communities, ensuring the country achieves its electrification goals by the DOE’s 2028 deadline.