Danish firms to invest $5B in PH wind farms

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ALL ABOUT POWER Danish Ambassador Franz-Michael Mellbin (right) is interviewed by Dante ‘Klink’ Ang 2nd, host of SMNI’s ‘Business and Politics’ and chairman and CEO of The Manila Times. PHOTO BY J. GERARD SEGUIA

A GROUP of investors from Denmark is putting up $5 billion to build offshore wind farms in the Philippines.

The Ambassador of Denmark to the Philippines Franz-Michael Mellbin said the investment in the energy sector reflects the growing interest among Danish companies to do business in the Philippines.

Interviewed by Dante “Klink” Ang 2nd, The Manila Times chairman and chief executive officer in the “Business and Politics” program on SMNI, the envoy said the Marcos administration has been “sending strong signals to the energy sector market and Denmark is responding to that in a positive way.”

Mellbin talked about the economic aspect of the bilateral relations between the Philippines and Denmark following the recent visits of President Ferdinand Marcos Jr. to Belgium and Switzerland.

“I have to say that we are on a roll, say between Denmark and the Philippines. And, you know, the amount of investments that are coming to the Philippines is a lot,” he said.

“We have a number of investors who are looking more carefully at the Philippines now. And we’re very happy for that and there was a very large investment announced,” he said.

Mellbin said there is “a group of investors led by Danish companies, who is the largest investor in renewable energy, who will invest $5 billion in the wind energy sector here in the Philippines.”



“That’s a lot because the Philippines gets about $10 billion in FDIs (foreign direct investments) every year. So, $5 billion is a huge chunk coming in and in a very important sector because the country is facing a power crisis and this is [about] offshore wind farms,” he said.

“And the timeline [when the project to be completed] could be short. It depends on the ‘red tape’ that we talked about before,” the ambassador said.

He said he has told President Marcos to “cut the red tape and we’ll cut the red ribbons. So, hopefully, you know I can stand there and look at the inauguration of the first offshore wind farm in the Philippines together,” he said.

Mellbin said there are areas that have been identified as possible sites for the wind farms, “but I’d like to leave it to the investor to point out where they gonna start the building.”

He said Energy Secretary Raphael Lotilla and other Filipino stakeholders were traveling to Denmark to attend “a large wind power conference called ‘Wind Europe’ going on in Copenhagen.”

“It’s a large [Philippine] delegation,” the envoy said, with Lotilla being accompanied by “private sector actors who are interested in power sector.”

“They will use that trip to inform themselves more about wind energy. How it can be used, especially offshore wind, because now the Philippines is going to move heavily into offshore wind. It could be an important part of your future power profile,” he said.

“It’s actually a good opportunity also to have political discussions not just with his (Lotilla’s) Danish counterpart. But there’ll be a lot of other ministers there who can then meet with him and talk about these things and how you manage it,” he said.





Mellbin said the Philippine delegation could inquire about how to manage the wind distribution system, the tariffs involved, “what are the best kind of incentives, all kinds of issues and I think that it’s a great learning opportunity to see.”

“You know, this is what one country has done. Also to hear from the whole industry because it is actually a global conference, what is happening in the wind sector,” he said.

Pressed on what he would recommend to the Philippine government insofar as energy is concerned, Mellbin said, “Basically, I recommend less dependency on external actors in your energy policy and your energy supply.”

“The more you can do with Filipino geothermal, Filipinos sun, wind, whatever you can do yourself, is better. Because reliant on external sources for energy is a risk,” he said.

The country also needs to diversify energy production, Mellbin said. “You can do onshore, offshore wind, you can do solar, even thermal, you can do biomass, hydro. You can do waste-to-energy. So you have a lot of options and combining this will help you build a very robust system,” he said.

Mellbin said renewable energy can also deliver “cheaper power to your industry and to the people because, unfortunately, the Filipinos are paying far too much for their power, their electricity. It’s a real problem and the price needs to come down.”

When it comes to financing for a renewable energy program, Mellbin said, “Think whatever you can finance yourself, you should reserve for those things that private equity will not finance.”

He stressed the need for a more robust infrastructure. “You need bridges, you need roads, you need metro, you need harbors, airports, you need power plants, you just need a lot,” he said.

“The smart strategy for your country is get foreign investors or domestic investors to come up with private equity and put in where it’s possible when it’s you know, physically viable,” Mellbin said.

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