Foreigners Face Nationality Hurdle in RE Projects

Article excerpt

MANILA, Philippines - Foreign investors eyeing to put in renewable energy (RE) projects in the country are hurdled by 'nationality restrictions,' including those for emerging technologies, such as for wind resource.They raised concern that "Philippine nationalization laws limit certain economic activities, or the exercise or enjoyment of a certain right, franchise, privilege, property or business only to Filipino citizens, or to corporations of which 60-percent of capital are owned by Filipinos."One foreign investor eyeing to put up a wind power facility in Luzon noted that their proposed project cannot take off from blueprint until they can tap a local partner to assume the 60-percent shareholdings in the corporate vehicle. That would be, of course, aside from waiting for the policy enforcements on feed-in-tariff and renewable portfolio standards, among others.Some investors admitted that the nationality restriction could be a deterrent to investment flows, as some foreign companies may just turn their investment dollars in jurisdictions with more liberal energy policies for such type of technologies.The implementing rules and regulations of the Renewable Energy Act spelled out 'nationality requirement' that investors must adhere to; heeding the provisions of Article XII, Section 2 of the 1987 Philippine Constitution, a pertinent part of which stipulates that: "All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State-"Department of Energy director Mario Marasigan further explained that indigenous energy sources, including wind, have all been interpreted as part of 'national patrimony', hence, their exploitation should be subject to the 60-40 nationality requirement. …