Full Breakdown
SM Investments Corp. and First Gen Corp. Expand Geothermal Energy Initiatives
3/8/2026, 9:07:42 PM
Investment in Geothermal Energy by SM Investments Corp.
SM Investments Corp. (SMIC) is set to invest over P3 billion (approximately $50 million) to develop six new geothermal concessions in the Philippines as part of its strategy to enhance its renewable energy portfolio. The company’s geothermal unit, Philippine Geothermal Production Company Inc., currently operates two steamfields: the Mak-Ban geothermal field in Calabarzon and the Tiwi geothermal field in Bicol. According to Frederic DyBuncio, president and CEO of SMIC, the development of these new concessions will occur sequentially, with initial drilling already underway in Malinao, Bicol, and plans to move operations to Labo in Camarines Norte.
The process of developing a geothermal steam field is extensive and capital-intensive, typically taking around five years from drilling to full operational capacity. This includes the construction of pipelines and power plants to convert geothermal steam into electricity. DyBuncio noted that careful site selection is crucial, as each drilling operation can cost approximately $100,000 per day, and developers often need to drill two to three wells per site to confirm the viability of a steam reservoir.
First Gen Corp.'s Commitment to Renewable Energy
In a parallel move, First Gen Corp. has allocated P41.7 billion for renewable energy projects this year, marking a 24% increase from the previous year's budget of P33.5 billion. Following the sale of its controlling stake in natural gas assets for P50 billion, First Gen is intensifying its focus on renewable energy, particularly geothermal. The company currently boasts a portfolio exceeding 1,700 megawatts (MW) from various renewable sources, including geothermal, hydro, wind, and solar power facilities.
Jerome Cainglet, president and COO of Energy Development Corp. (EDC), a subsidiary of First Gen, emphasized the company's commitment to expanding geothermal energy production. EDC plans to enhance its output through increased drilling activities and upgrades to existing facilities. Additionally, First Gen is exploring opportunities in Indonesia, with six potential drilling sites identified and an initial investment of around $30 million earmarked for exploration.
Broader Implications of Renewable Energy Investments
Both SMIC and First Gen's investments reflect a growing trend among Philippine companies to diversify into renewable energy, moving away from traditional sectors such as banking and retail. This shift not only supports the country's energy needs but also aligns with global efforts to transition to cleaner energy sources. The expansion of geothermal energy is particularly significant as it provides a reliable baseload capability, essential for the integration of other renewable sources like wind and solar.
Official Statements & Responses
Frederic DyBuncio stated, “We have six new concessions that we’ve acquired, and we’re developing each section one at a time.” He also highlighted the importance of careful site selection due to the high costs associated with drilling. Meanwhile, Jerome Cainglet remarked, “It’s a new opportunity to grow,” referring to First Gen's exploration efforts in Indonesia.
Criticism & Opposition
While the investments in renewable energy are generally viewed positively, concerns about the environmental impact of geothermal drilling and the long-term sustainability of such projects have been raised by environmental groups. Critics argue that the focus should also include investments in other renewable technologies that may have less environmental impact.
What's Next
As both companies proceed with their geothermal projects, further developments in drilling and construction are anticipated, which will be closely monitored by stakeholders in the energy sector.
