BPI, IFC seal clean energy risk-sharing arrangement

BPI, IFC seal clean energy risk-sharing arrangement

By Daxim Lucas
Philippine Daily Inquirer


MANILA, Philippines—One of the country’s largest banks has teamed up with the private financing arm of the World Bank to set up a risk-sharing facility meant to encourage lending to sustainable energy projects that mitigate climate change.

In a statement, the International Finance Corp. said it had entered into a partnership with Bank of the Philippine Islands to finance projects that promote sustainable and renewable energy.

The agreement—the first such accord to be signed by IFC and a financial institution in East Asia outside of China—comes on the heels of an attempt by nations to negotiate an international agreement to curb carbon dioxide emissions at the United Nations Climate Change Conference in Copenhagen.

“We are taking full advantage of IFC’s support and global experience to help develop our portfolio of sustainable energy loans and leases, and pursue the perceived higher-risk renewable energy market with greater confidence,” BPI chief operating officer Gil A. Buenaventura said in a statement.

In the past, IFC had supported BPI’s lending to energy efficiency projects through its Sustainable Energy Finance Program.

“The partnership between IFC and the Bank of the Philippine Islands is part of our strategy to scale up lending to projects in energy efficiency and renewable energy,” IFC director for global financial markets James Scriven said. “This is essential in enabling market-based approaches in developing countries to address climate change.”

IFC is the only international financial institution focused exclusively on the private sector, the engine of sustainable development in emerging markets.

Along with its parent, the World Bank, it is seeking a capital increase to strengthen its ability to create opportunity for the poor in developing countries, through measures like lending support for sustainable energy projects.

Previous statements made by IFC officials indicated that the facility would be initially worth about $20 million. IFC plans to lend an average of P100 million each to about 20 projects under the scheme.

BPI, for its part, has so far booked about P1.2 billion in loans to at least five firms involved in sustainable energy projects.

So far, BPI has been undertaking project financing for large proponents such as the Aboitiz and Lopez energy firms which function independently of the joint IFC facility

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