COA: P10.39-B in terminated solar contract obligations tied to Leviste-linked firms

MANILA, Philippines — The Commission on Audit (COA) has flagged the Department of Energy (DOE) over P10.77 billion in outstanding financial obligations from 37 terminated solar energy contracts.

In its audit report on the DOE for calendar year 2025, the agency cited 96% of contracts are attributed to companies under Solar Philippines group founded by Rep. Leandro Leviste (Batangas).

Auditors warned of a risk that the government may fail to collect the financial obligations arising from the terminated Solar Energy Operating Contractsm or SEOCs.

The obligations cover unfulfilled work program and training commitments, development assistance and contractual penalties.

Of the P10.77 billion demanded from developers, P10,389,331,719.44 was attributed to companies under the Solar Philippines group.

State auditors noted that the P10.39-billion amount is equivalent to about 494 years of the annual funding requirement of the DOE's Solar Energy Management Division, which had a P21.02-million allotment for 2025.

"This comparison highlights the significance of the outstanding obligations and underscores the importance of adopting timely and effective measures to ensure their collection in order to protect government interest," COA said.

Contracts terminated over noncompliance

Most of the contracts were terminated over developers' failure to comply with approved work programs, renew required performance bonds or meet material terms and conditions, according to the audit.

Some contracts were terminated "due to the developers' non-compliance with the approved Work Program, non-renewal of the required performance bond, and failure to comply with the material terms and conditions of the contracts," COA said.

A number of contracts were also ended after developers voluntarily surrendered them.

Among the contracts identified in the audit was the Santa Rosa Nueva Ecija 2 Solar Power Project under Solar Philippines Nueva Ecija Corp., which carried more than P10.34 billion in financial obligations.

COA urged the DOE to exhaust legal and administrative remedies to collect the outstanding amounts, strengthen its monitoring of active contracts and review its policies on awarding and implementing solar energy service contracts. Such steps, it said, should reduce cancellations and the resulting loss of potential generating capacity.

DOE seeks legal action

In response to the audit findings, the DOE said its Legal Division for Renewable Energy had referred the Solar Philippines service contracts to the Office of the Solicitor General for appropriate legal action.

The department is pursuing about P24 billion in financial obligations and penalties from Solar Philippines-linked companies, covering contracts terminated in 2024 and 2025.

Energy Secretary Sharon Garin earlier said 33 terminated contracts linked to the group represented more than 11,400 megawatts of committed renewable energy capacity. 

The agency also said remedies involving 36 other solar developers with terminated contracts are being considered.

Impact on power supply 

For the auditing agency, terminated contracts reduced the renewable energy capacity that the projects had been expected to contribute to the country's power supply.

The audit report described the cancellations as resulting in "approximately 6.796 Gigawatts-hours of unrealized potential generating capacity."

"Such foregone capacity represents a substantial diminution in the anticipated expansion of solar energy resources, which could have supported the government's objective of enhancing energy security, diversifying the power generation mix, and increasing the share of renewable energy in the national energy supply," COA said.

The audit findings come as the Office of the Ombudsman conducts a preliminary investigation into plunder and graft complaints against Leviste, his mother Sen. Loren Legarda and former Alfonso Cusi, a former energy secretary, over separate allegations involving solar energy projects.

The respondents have denied wrongdoing.

Legarda and Leviste have submitted counter-affidavits to the Ombudsman. Legarda is currently undergoing medical treatment in France and has extended her Senate medical leave through October 9, while her spokesperson said Leviste is with her to assist with her medical needs.