Nuclear vs. renewables: The battle for financing

While the Philippines is exploring the reentry of nuclear power, securing financing may prove challenging as some local banks remain cautious about backing such projects.

- BY GABRIELL CHRISTEL GALANG

In an exclusive interview, Michael Ricafort, Chief Economist at Rizal Commercial Banking Corp. (RCBC), explained that the high costs and persistent safety concerns are major factors that could discourage financing.

"Safety issues have been the nagging concerns, as evidenced by the BNPP (Bataan Nuclear Power Plant) that was left unused despite being expensive," he told the Manila Bulletin. The BNPP, finished in 1984, was mothballed two years later due to safety issues, corruption allegations, and cost overruns.

Ricafort noted that nuclear developments come with more than just environmental risks. He also cited issues such as nuclear waste management, the risk of terrorism, and the potential impact of natural disasters on power facilities.

"Thus, the profitability or at least financial feasibility of nuclear power facilities would need important considerations on the financing side," he said.

Another obstacle is the government's fiscal deficit. "The government also has budget deficits, which is another challenge, given that nuclear power facilities/infrastructure are expensive," Ricafort added.

He pointed out that financing for other energy sources, such as renewable energy (RE), is more attractive to lenders because these projects have become cheaper and safer to develop and operate.