The grant that turned heat into ‘gold’

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March 7, 2026 | 12:00am

Notes on the beat

MANILA, Philippines — A grant from the New Zealand government 50 years ago gave Energy Development Corp. (EDC) the spark it needed, allowing the then state-owned company to purchase its very first drilling rig.

This paved the way for the successful commissioning of the Tongonan 1 and Palinpinon 1 steamfields in Leyte and Negros Oriental, firmly placing the Philippines on the global geothermal map.

EDC was born amid the global oil crisis of the early 1970s, a time when the Philippines faced the harsh reality that most of its energy needs were sourced from foreign soil.

At the time, the government recognized the urgent need to ensure energy security and reduce dependence on imported oil by developing local indigenous resources.

After 50 years, what began as a grant and a dream has grown into a legacy, with EDC continuing to strengthen the Philippines’ position as a global geothermal leader.

“From the very beginning, the mandate of EDC was clear: harness indigenous resources and develop a homegrown power supply that will make the country’s energy grid resilient and secure,” said tycoon Federico “Piki” Lopez, chairman of First Gen Corp.

EDC, which became a subsidiary of First Gen after its privatization in November 2007, is celebrating its golden anniversary this year.

Yet for EDC president and COO Jerome Cainglet, the company is just stepping into its most exciting chapter.

“We don’t stop at 50. We fervently look forward to another 50 years. We will continually strive to provide baseload power to the Filipino people,” Cainglet said during EDC’s 50th-year celebration.

To date, First Gen has invested more than P200 billion in exploration, drilling, plant development, rehabilitation, operations and maintenance across its geothermal portfolio.

Through EDC, the group currently operates around 1,400 megawatts (MW) of geothermal capacity, accounting for more than half of the Philippines’ total geothermal output.

“This next chapter will require us to be bolder still — in how we invest, how we collaborate and how we move forward together,” First Gen president and COO Francis Giles Puno said.

“As we move forward with collective boldness, I am confident that together, we will build an energy future that is powered by good — more secure, more sustainable and more resilient for generations to come,” he added.

Geothermal de-risking

Fifty years ago, a grant helped the Philippines rise to become the world’s second-largest geothermal producer — behind only the United States — until Indonesia overtook it in 2018.

This year, a new financial mechanism is poised to help the Philippines reclaim its place on the global geothermal stage.

“We are moving forward with our Filipino geothermal resource de-risking facility,” Energy Secretary Sharon Garin announced at the EDC event.

The main risk in geothermal development comes during the exploration stage, as drilling wells does not guarantee viable results, leading to significant investment without assured returns.

Notably, drilling a single hole for geothermal exploration is estimated to cost between $6 million and $8 million.

With the de-risking facility, however, the government will share exploration costs with qualified developers, potentially covering up to 50 percent of drilling investments through convertible loans.

If drilling efforts are unsuccessful, the funding will be converted into grants to ease the financial strain on developers.

“Exploration becomes a shared journey for our country’s shared progress. We will unlock more investment, more discoveries and ultimately more dependable power to the Filipino people,” Garin said.

The Department of Energy has estimated around 2,000 MW of untapped geothermal potential in the Philippines.

In the global geothermal ranking, the Philippines was at the third spot with a total installed capacity of 1,935 MW as of 2023. This placed the country just slightly ahead of Turkey, which had an installed capacity of 1,682 MW, based on the latest available data.