LBP offers new financing facility for livestock sector

MANILA, Philippines - State-owned Lanbank of the Philippines is encouraging  more livestrock raisers and landfill owners to take advantage of a credit facility to finance the incorporation of bioenergy mechanisms in their operations and facilitate the trading of carbon credits in the international market.

The creation of the Carbon Finance Support Facility follows the registration of Lanbank’s programs of activity for the

promotion of production and use of bioenergy from animal manure and solid waste from land fills by the United Nations Framework Convention on Climate Change last year. 

“These two programs are front and center of the Landbank Carbon Finance Support Facility through which we provide financial and technical support to pig farms and landfill facilities and assist them throughout their CDM (Clean Development Mechanism) processes,” said Landbank president and CEO Gilda Pico.

The CDM is one of the cooperative mechanisms designed to implement the Kyoto Protocol in  reducing greenhouse gas (GHG) emission of developed countries by carbon sequestration and issuances of carbon credits that can be sold to the international market.

A carbon credit, which is equivalent to one ton of carbon dioxide emmission, is awarded to countries or groups that have

reduced their GHG emissions below their emission quota. This can be sold to countries or companies to allow them to emit  beyond their emission quota.

Landbank Environmental Program Management Department manager Prudy Calado said the credit facility would be part of the regular loan portfolio of Landbank and has no fixed size.

Livestock raisers who avail of the loan could hire their own biotechnology provider or seek assitance from the United States Environmental Protection Agency.  

Landbank on Friday signed agreements with 14 pig farms and three landfill operators. The adoption by these companies of bioenergy for their power requirements would result to emission rediuctions of 270,000 tons of carbon dioxide.

This is equivalent to carbon sequestered by 6.2 million tree seedlings grown for 10 years or the annual GHG emission from 50,700 passenger vehicles. 

The facility has been existing since 2010 but response from the investor community has been slow because of lack of familiarity with the product.

Since 2010, 41 farms have expressed interest but only 14 have so far signed an agreement with the bank.

“We are still reviewing their qualifications based on the basic documents submitted to us,” said Calado.

Piggeries that can qualify for the loan program are those with a hog population of at least 300 sows.

The Marcela Farms in Bohol is the first Lanbank-financed project under the porgram. Currently in the process of inclusion to the program is the Biotech farms in Banga, South Cotabato.

Calado said the two farms stand to receive P2 million worth of carbon credits each from reductions in GHG emmissions based on the 9.5 euro per ton of carbon dioxide equivalent.

“We are encouraging farm owners to loan for the biogas digester and to participate in carbon trading,” said Calado.

A biogas digester would cost P20 million to P30 million.

“In power generation alone, the investment can be recovered,” said Calado.   

Landbank has formed a partnership with the World bank for the sale of carbon credits to the international market to be generated from emission reductions resulting from the program.

Landbank has also signed an agreement with Asian Energysystems Corp. for the sale of carbon credits to be generated by its Consolacion Sanitary Landfill, Methane Recovery and Power Generation facility located in  Brgy. Polog Consolacion, Cebu which has the potential to reduce GHG emmissions by up to 47,000 tons annually.

“Through these programs, we hope to be able to support more pig farms and landfill activities in the Philippines and strengthen the development and expansion of waste management systems to protect the environment, reduce threats to public  health and help mitigate and adapt to the impacts of climate change,” said Pico.