BPI inks risk-sharing facility with IFC for sustainable energy loans

MANILA, Philippines - Ayala-controlled Bank of the Philippine Islands (BPI) has signed a risk-sharing facility agreement with the International Finance corp. (IFC) for sustainable energy loans.

The IFC is the private sector investment arm of the World Bank.

In a statement, BPI said the risk-sharing facility will help mainstream sustainable energy finance to promote energy efficiency and renewable energy projects. The agreement – the first such accord to be signed by IFC and a financial institution in East Asia outside of China – comes as nations 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 pursuing the perceived higher-risk renewable energy market with greater confidence,” said Gil A. Buenaventura, BPI chief operating officer.

The IFC has been supporting BPI’s lending to energy efficiency projects already through its Sustainable Energy Finance Program. The World Bank subsidiary is the only international financial institution focused exclusively on the private sector, the engine of sustainable development in emerging markets. Along with the International Bank for Reconstruction and Development (IBRD), it is currently seeking a capital increase to strengthen its ability to create opportunity for the poor in developing countries – including supporting lending for sustainable energy projects.

BPI, meanwhile, released its second sustainable program report or the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines last November. It is the first Philippine financial institution to embrace the global sustainability program.

The risk-sharing facility allows BPI to expand the funding portfolio for its energy efficiency lending programs. In turn, the IFC will guarantee half or all of the loans extended.

BPI president Aurelio R. Montinola III said the bank has set aside P2 billion for lending.

“We are prepared to expand it to P5 billion,” Montinola said.

BPI has already extended P1.2 billion to finance projects related to renewable energy, sustainable energy and energy efficiency projects.

Montinola revealed that the commercial bank of the Ayala Group of Companies has already invested P100 million for energy efficient equipment for its head office and its 865 branches, business centers and remittance centers nationwide.

BPI expects to reduce overall energy and water consumption by five percent due to its energy efficient equipment.

It is likewise looking at the transformation of all its branches, to minimize its carbon footprint, and forge more partnerships with energy and environment conservation advocates such as the WorldWildLife Fund (WWF).