MANILA, Philippines - Bank of the Philippine Islands (BPI) has extended P5.56 billion in loans to sustainable energy projects under the Sustainable Energy Finance (SEF) program, a partnership with the International Finance Corp. (IFC).
IFC, the private investment arm of the World Bank, said BPI is the first private commercial bank in the Philippines initiating financing for sustainable energy investments.
The Ayala-led commercial bank and the IFC are also in the process of finalizing a risk sharing agreement likewise focused on lending for sustainable energy programs and energy-related projects.
According to BPI president Aurelio R. Montinola III, the risk-sharing scheme would mean that the bank would raise the funds while the IFC will guarantee the funds as protection for the financial institution.
“Our long-term goal is to see BPI driving innovation in the energy market and adding value to financially viable client projects, and at the same time bringing about positive social and environmental impacts,” Montinola said.
With IFC advisory support, BPI granted P1.2 billion worth of loans and another set of projects in various stages amounting to P4.36 billion.
The projects include expanding a biogas facility in a 15,000-head piggery in Bulacan, retrofitting a corrugated box factory in Cagayan de Oro, and constructing a corn husk post-harvest facility in Cagayan Valley.
“Our SEF team has learned many lessons from the IFC team. As we disseminate these learnings to the marketing groups, we will be able to pursue this SEF market, which is perceived by many as high risk, with greater confidence,” the BPI chief executive said.
The SEF is funded by the Global Environment Facility and covers advisory services to financial institutions, training for service and technology providers, engaging regulatory agencies, and raising market-awareness.
Two weeks ago, BPI released its 2008 Sustainability Report, making it the first commercial bank in the Philippines to do so based on the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines.
In fact, BPI already invested P100 million for energy efficient equipment for its head office and its 865 branches, business centers and remittance centers.
The program aims to reduce by five percent the energy and water consumption of the banking group.