Geothermal handbook: PlanninG and Financing power Generation t e c h n I c a L r e p o r t 2 / 2

Public-Private Partnerships
A public-private partnership (PPP) is a general term for a financing scheme that integrates 
commitment of resources from both public and private participants to implement an investment project 
or program, usually in infrastructure. In geothermal power development, a PPP can be especially 
effective if it covers all major project phases including test drillings, field development, and power 
plant construction. This allows for a tailor-made arrangement in which the public sector concentrates 
its contribution of resources in the riskier upstream phases, while the private sector partner finances 
the bulk of the capital costs in the more mature phases. 
B O x 3 . 5
Philippine Incentives for Renewable Energy under the Renewable 
Energy Act of 2008
The Renewable Energy Act provides fiscal and non-fiscal incentives for Renewable Energy investors and 
mechanisms to help ensure a market for renewable energy, including:
• An income tax holiday (ITH) for the first 7 years of commercial operation
• Duty-free importation of Renewable Energy machinery, equipment, and materials
• Special realty tax rates on equipment and machinery
• Net operating loss carry-over
• Corporate tax rate of 10% after 7 years of ITH
• Accelerated depreciation (as an alternative to ITH)
• Zero value-added tax
• Tax exemption of carbon credits
• Tax credit on domestic capital equipment and services
• Tax exemptions to manufacturers of Renewable Energy equipment
• Financial assistance through the Development Bank of the Philippines and other suppliers of
preferential 
capital
Source | Peñarroyo 2010.

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G e o t h e r m a l H a n d b o o k : P l a n n i n g a n d F i n a n c i n g P o w e r G e n e r a t i o n 
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