Lotilla backs 100% foreign ownership in renewable energy projects

Energy Secretary Raphael Lotilla welcomed the Department of Justice (DOJ) opinion that relaxes foreign ownership restrictions in renewable energy sector.

DOJ has opined that exploration, development, and utilization of inexhaustible RE sources are not subject to the 60:40 foreign equity limitation as provided under Section 2, Article XII of the Constitution.

Lotilla said this opinion accelerates the attainment of President Ferdinand Marcos Jr.’s programs to develop the country’s indigenous and renewable energy.

The DOJ opined that the Constitutional foreign ownership restriction on the exploration, development and utilization of natural resources only covers things that are susceptible to appropriation, thus excluding the sun, the wind and the ocean.

The DOJ also opined that the phrase “all forces of potential energy” also mentioned in the Constitution should be interpreted to exclude “kinetic energy”.

“Potential energy” is “energy at rest” while “kinetic energy” is “energy in motion.”

Renewable energy sources such as solar, wind, hydro and ocean or tidal energy sources are considered kinetic energy sources.

The DOJ noted, however, that the implementing rules and regulations (IRR) of Republic Act No. 9513 must be amended to conform to the opinion.

The DOJ also noted that the “appropriation of waters, direct from the source, direct from the source, shall continue to be subject to the foreign ownership restriction in the Water Code.”

Lotilla said the DOJ opinion would attract more foreign investments in the renewable energy sector.