MANILA, Philippines — Securing a massive foothold in the country’s clean energy transition, the renewable energy arm of SM Investments Corp. (SMIC) has dominated the government’s latest green energy bidding round. The Department of Energy (DOE) officially awarded Philippine Geothermal Production Co. Inc. (PGPC) the contract to develop the Southern Leyte Geothermal Project.
The award showcases SM’s aggressive transition into heavy infrastructure utility markets, solidifying its role as a leading player in sustainable energy development.
The geothermal asset was secured under the government’s fifth round of the Open and Competitive Selection Process (OCSCP-5), an initiative launched by the DOE to fast-track exploration:
[ THE SOUTHERN LEYTE DEVELOPMENT PROFILE ]
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[ RECONNAISSANCE PARAMETERS ] [ FINANCIAL MATRIX ]
• **The Asset Boundary:** Geographically mapped as **Pre-Determined • **Capital Scaling:** The project feeds directly into PGPC’s active
Area 2 (PDA 2)**, stretching across Southern Leyte. • **₱3 billion capital expenditure fund** set for this year.
• **The Potential Capacity:** The geothermal reservoir holds a initial • **The Long-Term Goal:** Part of a broader strategy to double the
estimated power generation capacity of **25 megawatts (MW)**. • company’s overall clean energy capacity over the next 5 to 7 years.
The fifth round of the competitive selection process drew mixed interest from the local power sector, with energy conglomerates selectively bidding for the highest-yield projects while completely bypassing riskier locations:
[ THE OCSCP-5 ENERGY MARKET MATRIX ]
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[ PGPC Victory ] ──► Secured the crown-jewel **Southern Leyte Geothermal Project (PDA 2)**
to expand its baseload steam footprint outside Luzon.
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[ Hydroelectric Wins ] ──► **Almanapower Corp.** swept the bidding for three specific water-run assets:
the 3.4-MW Solsona, 1.4-MW San Juan, and 1.2-MW Binongan hydro plants.
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[ Wind Power Allocation ] ──► **Sara Philippines Holdings Corp.** emerged victorious, securing the exclusive contract
to develop the massive San Isidro wind power facility.
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[ The Unawarded Deficit ] ──► The DOE reported a complete lack of market interest for five other assets;
four hydro blocks and one geothermal zone received zero bid applications.
Despite the push for clean energy, geothermal exploration remains one of the most high-risk sectors in the local utilities market.
| Exploration Stage | Standard Operational Cost | Technical Risks & Structural Mitigation |
| Exploratory Well Drilling | Standardly ranges between $10 million to $12 million per specific drill site. | Total Financial Risk: Developers face high financial exposure with zero upfront guarantee that a drilled well will tap into a commercially viable steam reservoir. |
| State De-Risking Facility | Proposed Policy Support: The DOE is drafting a localized cost-sharing framework for deep exploration. | Risk Alleviation: Intended to absorb a portion of early exploratory losses to encourage private firms to test untapped deep volcanic fields. |
“The award of PDA 2 allows PGPC to continue its mission of discovering and developing clean, baseload geothermal energy sources that will help secure the country’s energy future,” the company stated, confirming that the Leyte site will serve as its primary exploration hub in the Visayas region.
The acquisition of the Southern Leyte asset diversifies an energy portfolio that already includes landmark steamfield operations in Tiwi (Albay) and Mak-Ban (Laguna/Batangas) supplying nearly 700 MW to the national grid. Beyond its mature assets, PGPC is actively conducting initial exploration works across Kalinga, Benguet, Cagayan, and Albay. The long-term plan is to harness these sites to channel extra power directly into the Luzon grid, buffering the capital region from supply shortfalls. By locking down new projects through open bidding platforms, SM ensures its power generation arm remains ahead of the pack—positioning itself to capitalize on the country’s strict clean energy targets while securing stable, long-term returns for its shareholders.
