China to Build $1 Billion Hydropower Facility in Philippines, Signaling Continued Uptick in Relations
On July 18, 2017, the Power Construction Corporation of China signed a $1 billion contract with Filipino firm Olympia Violago Water and Power for the design, procurement, and construction of a proposed 500 MW Wawa Pumped-Storage Hydropower Project. The deal is the latest significant piece to the more robust bilateral relationship being formed between the two countries in the period since the election of President Rodrigo Duterte in 2016.
Access to energy is one factor that has incentivized China to build up its presence in the South China Sea in recent years. If Beijing can assist with the development of large-scale renewable energy in the Philippines and other claimant states, it may be able to persuade them to reduce their opposition to Beijing’s bid for control of resources lying under the sea. The Wawa project is also of symbolic value for China, which has steadily increased its position as an exporter of clean energy technology in recent years and aspires to position itself as a core defender of the Paris Agreement on global warming.
Construction on the 500 MW facility is set to begin in 2017, with the plant expected to be commissioned in 2022. The Wawa project is being held up by the Philippines’ as part of its plan to triple current levels of renewable energy production by 2030.