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Business

China Bank, IFC ink deal for financing green projects

- Ted P. Torres -

MANILA, Philippines - China Banking Corp. has joined the green financing bandwagon as it signed an agreement with the International Finance Corp. (IFC) last Friday.

Under the agreement, China Bank will develop a financial lending program for clean energy and energy efficient projects with the help of the IFC, the investment arm of the World Bank.

According to China Bank first vice president for corporate planning Alexander C. Escucha, the bank will review its existing business clientele and new business applications.

“For the existing business clients, we will review them and find out if they are willing to have us conduct a study on their processes with the help of the IFC experts,” Escucha said.

China Bank aims to develop a stand-alone sustainable energy lending or financing program. IFC will provide assistance in strategy development, market awareness, monitoring and evaluation, training, deal origination, and other areas.

Escucha said the program should result in savings for the business borrowers through an energy efficiency program.

The other domestic financial institutions that have similar agreements as partner banks are the Bank of the Philippine Islands (BPI), BDO Unibank Inc. (BDO), and BPI GlobeBanKO.

China Bank senior executive vice president and chief operating officer Ricardo Chua said the program becomes more relevant with the increasing cost of electricity and other energy sources.

“In fact, IFC will help us build our in-house capability in this relatively new business line,” Chua added.

Since its launch in 2008, IFC’s sustainable energy finance program has developed with bank partners a pipeline of some P4.26 billion (roughly $100 million) in loans for energy efficiency and renewable energy projects.

These projects have reduced energy use by more than 50,000 megawatt (MW) hours and generated over 60,000 MW of clean energy each year, and cut greenhouse-gas emissions by nearly 500,000 tons annually.

IFC resident representative to the Philippines Jesse Ang said in a separate statement that together with their partner banks, the sustainable energy finance program effectively promotes clean energy and the smart use of energy.

“High power rates, increasing demand for electricity, and the Philippines’ vulnerability to climate change underscore the importance of lending to sustainable energy projects. IFC will continue to promote this initiative to help ease the burden of Filipino households and businesses,” Ang added.

As early as 2008, IFC has partnered with BPI, the bank of the Ayala Group, to establish a P5-billion financial portfolio directly related to clean energy and energy efficiency projects.

The energy efficiency and renewable energy projects had been translated to 142,087 MW of energy saved, 208,206 MW of clean energy produced, and 716,744 tons of carbon emissions reduced.

ALEXANDER C

AYALA GROUP

BANK

BANK OF THE PHILIPPINE ISLANDS

CHINA BANK

CHINA BANKING CORP

ENERGY

ESCUCHA

IFC

INTERNATIONAL FINANCE CORP

PHILIPPINES JESSE ANG

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