German investors in the power sector would like the government to amend the implementing rules and regulations of the Republic Act 9513 or the Philippine Renewable Energy Law (RE Act) to provide a clear exemption of sun and wind energy sources from the foreign equity restriction of the Constitution.

Dr. Ing Gunter G. Matschuck, president of Mashcinen & Technik, Inc. (MATEC) told reporters at a press conference for the German-Philippines Mabuhay celebration the need to amend the current IRR of the RE Act because sun and wind energy sources are being considered Philippines natural resources and under the Philippine Constitution utilization of the country’s natural resources are reserved only to Filipinos.

“The implementation of the IRR is not quite satisfactory because wind and sun are considered natural resources of the Philippines so foreign participation is limited only to 40 percent. The Constitution only speaks of natural resources,” he said.

“There’s a big problem there in interpretation. I want to open their eyes that this is not the way to attract investors if we do not correct the legal structure because that can be overruled by Supreme Court,” he pointed out.

Matschuck called it “ridiculous” to limit foreign participation on energy projects using wind and sun as energy sources. RE sources include wind, solar, ocean, run-of-river hydropower and biomass.

“The sun shines all over the world,” said Matschuck and that wind blows everywhere.

Germany is the world’s biggest producer of renewable energy and with the RE Act more German investors are expected to invest in this sector.

Matschuck said the issue he raised may sound insignificant but this is one legal issue that has to be addressed sooner to present a clearer picture to prospective investors and avoid future legal issues.

Matschuck said that while there are many ways to go around the 60-40 Constitutional limitation on natural resources like mining, investors would prefer this has to be formally addressed by the government via the IRR of RE Act.

“Would this mean only Filipino companies can sell electricity using wind and solar energy sources?” he asked.