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PIA Press Release

PGMA declares geothermal areas as ecozones

By Renee F. De Guzman

San Fernando City, La Union (11 September) -- In a bid to generate more investments in the power-generation sector, the President signed the Executive Order creating the "Generating Investments Geothermal Area", in Davao City recently.

The President explained that the acronym GIGA connotes bigness to harnessing the potential that such geothermal power plants bring, including the eventual availability of cheap power to the constituents.

"Cheap power by itself is already enough powerful draw but we will make it more irresistible by throwing in more fiscal incentives which an ecozone is allowed to grant" she explained, adding that it involves synergy. " If we build they will come."

The still unnumbered executive order converts the geothermal areas in Mt. Apo in Davao, Bago in Negros Occidental, Palinpinon in Negros Oriental, Bacon-Manito in Sorsogon, Tongonan in Leyte, Tiwi in Albay and Makban in Laguna as economic zones where companies can choose their power supplier under the open market system.

"What should lure investors to set up shop near geothermal plants is the same reason that led government to put in billions to put up these plants: the availability of cheap and clean energy," the President said upon signing the executive order..

Cost of energy in these areas is expected to become cheaper as the local governments of the host communities of the geothermal plants will be receiving big royalties from the plants which they can use to subsidize the energy bills of their constituents.

The declaration of geothermal areas as special economic zones with provisions of granting substantial electric subsidy, foreign and local investors will have the best viable option to invest in the contemplated geothermal ecozones as low power cost means low cost of doing business, which in turn means more profit.

The establishment of these ecozones will not only attract investment and create more jobs but will also spur development in the host communities of the geothermal plants.

The geothermal projects also help in poverty alleviation and countryside development by providing means to stimulate the local economy.

The order placed the seven areas under the supervision of the Philippine Economic Zone Authority, a move that will also lower industrial power rates that are currently the highest in Southeast Asia.

In 2005, geothermal power accounted for 17.55 percent of the country's power generation mix, with natural gas at 29.8 percent and coal at 27 percent. PNOC-EDC is the largest geothermal producer in the country. (PIA La Union) [top]

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