Is Philippines Pushing Investors Away?

Is Philippines Pushing Investors Away?

If you ask any investor what is one thing that he dislikes the most about countries he’s investing in, he will tell you that it’s limitations. Investors, especially the ones investing in renewable energy, aren’t really keen on investing into a country which has various limitations which, in a direct or indirect way, prevent the investor from making as much return on his investment as possible. It seems that the Philippines are doing exactly this, which made the local developers of renewable energy equipment raise their voice. They issued a warning to their government, reminding them that the production limit of 50 megawatts per solar facility is actually making the country lose money. They suggested that the limit should be increased to 269 megawatts per facility in order to maximize profits for everyone — the government would get more money through various taxes and incentives, the investors would significantly increase their income and local equipment producers would improve their business. On top of all that, the sole fact that the Philippines have high limits would attract other investors to come and build various solar energy facilities.

What’s really interesting is that the government of Philippines at a meeting in June 2010 actually agreed to have a 269 megawatt limit, but over the last year decreased it without explanation on two occasions. It was first cut to 100 megawatts, and a few months ago it was finally brought down to 50 megawatts per facility.

The Philippine Solar Power Alliance issued a statement where they explain that the current limit of 50 megawatts would prevent the country from making around $700 million. That means that with the limit in place the country would be making only $150 million. If the limit would be increased to 269 megawatts, the country would raise its profits to $850 million.

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