Current policy under the Philippine Energy Plan seeks to increase the share of renewable energy in the generation mix from 22% today to 35% by 2030 and over 50% by 2040.
We propose two SLB structures. One would be tied to achieving and potentially exceeding the 2030 renewable energy target. The second would be linked to a hypothetical 2030 emissions ceiling of 295 MtCO₂e, positioned between the Philippines’ current NDC commitments.
Using the AFII option pricing models, we estimate the likelihood of target achievement for both structures, demonstrating how SLBs could lower the sovereign’s cost of capital while providing investors with a risk-adjusted performance hedge. As the Philippines finalises its updated NDC, incorporating ambitious but achievable interim targets would signal a clear commitment to a credible low-carbon pathway.
