Philippines to Secure $800 Million World Bank Loan for Clean Energy and Water Reforms

The Philippine government is preparing to borrow USD 800 million (over PHP 45 billion) from the World Bank in early 2026 to finance reforms aimed at accelerating renewable energy adoption, strengthening the electricity market, and improving water management nationwide.

The financing will come under the Philippines Second Energy Transition and Climate Resilience Development Policy Loan (DPL), which is scheduled for board approval by the World Bank on January 26, 2026, according to a project information document dated September 23.

The World Bank said the program will support reforms to scale up clean energy technologies, enhance security and competition in the electricity market, and improve water governance across multiple sectors.

The initiative will be jointly implemented by several government agencies, including the Department of Energy (DOE), Department of Environment and Natural Resources (DENR), Department of the Interior and Local Government (DILG), Department of Trade and Industry (DTI), and the Energy Regulatory Commission (ERC). Oversight will be led by the Department of Finance (DOF), which will coordinate monitoring and implementation alongside agencies such as Budget and Management (DBM), Public Works and Highways (DPWH), and Economy, Planning, and Development (DEPDev).

This second-phase loan follows the Philippines First Energy Transition and Climate Resilience DPL, an USD 800-million program approved by the World Bank in March 2025. The new facility is expected to deepen institutional reforms to expand renewable energy, improve electricity market efficiency, and strengthen water resource management.

Key reforms under the program include offshore wind auctions, wider electric vehicle adoption, improved energy efficiency measures, competitive procurement mechanisms, resolution of stranded costs, enhanced reserve and ancillary markets, and professionalization of local utilities. It also seeks to enforce cost-recovery tariffs, attract private sector clean-tech investments, and provide support for underperforming local government units.

The Second Energy Transition and Climate Resilience DPL forms part of the World Bank Group’s broader commitment of up to USD 23 billion in financing for the Philippines from mid-2025 to mid-2031, including USD 18 billion through the International Bank for Reconstruction and Development (IBRD).