Full foreign ownership of solar, wind and hydro projects

In November 2022 the Department of Energy amended the rules of the Renewable Energy Act to allow full foreign ownership of solar, wind, hydro and ocean energy projects. The circular followed a Department of Justice opinion that sunlight, wind and moving water are not natural resources within the meaning of the constitutional rule that limits foreign equity in their exploitation to 40%. It took effect in December.

Compiled in September 2026 from the releases of the time, with the revisions the agencies have published since. Nothing here is a forecast.

What changed

A foreign developer can now hold a service contract for a solar, wind, hydro or ocean energy project without a Filipino majority partner. The permits, the grid connection and the land are unchanged: land remains subject to the ownership rules, which is why leases matter more than they did.

What did not change

Biomass was never inside the restriction. A crop residue is not a natural resource in the constitutional sense, and biomass projects had been open to full foreign ownership under the original rules. Geothermal remains a natural resource, with the financial and technical assistance agreement as its route for foreign capital.

What it did to the pipeline

The service contract applications of the following year show the effect: offshore wind contracts, in particular, went to international developers who no longer needed a local majority. The second auction round, seven months later, drew a longer list of bidders than the first. For a Philippine site, the practical result is more counterparties with capital looking for a project.

The ownership question a plant faces

A factory that wants a residue-fired plant on its site can now have it built, owned and operated by a foreign company, or by a Philippine one, or by itself. The structure is a commercial choice rather than a legal constraint, and the choice is usually about who carries the construction and operating risk rather than about who owns the steel.

We work with developers and technology providers on the Philippine execution side: permits, grid, fuel and construction. Tell us about the project. The figures behind each quarter are in the quarterly market brief.