DBP allots P12B for biofuel projects

MANILA, Philippines - The Development Bank of the Philippines (DBP) has set aside P12 billion for lending for biofuel and biomass projects this year, a ranking official said yesterday.

DBP executive vice president for development sector Benedicto Ernesto R. Bitonio Jr. said the financial institution’s priorities include infrastructure and logistics, social development, micro- and small and medium enterprises (MSME), and environment, including renewable energy and biofuels.

Speaking at the first Philippine International BioEnergy Conference (PIBEC), Bitonio said the country’s energy sector is faced with a number of challenges, including lack of capacity, sources of funding, and environmental issues.

He said DBP has the ability to address some of these concerns directly through financing, or indirectly by tapping funding sources.

The P12-billion portfolio for biofuels and biomass projects will be sourced from overseas development assistance (ODA) funds, project financing, pooled financing, and internally-generated funds, he noted.

DBP is the favored conduit for development funds coming from the World Bank, the Japan International Cooperation Agency (JICA), Asian Development Bank (ADB) and Japan Bank for International Cooperation (JBIC).

Bitonio said for energy and environment projects, the bank favors renewable energy projects (which include biomass and biofuels), conventional energy generation, transmission and distribution, energy efficiency, and other alternative fuels.

“What we can offer is project financing for capital expenditures, working capital, interest payments during construction, and consultancy services. And based on the project’s cash flows, DBP offers a maximum term of 15 years plus a five-year grace period on the principal,” the DBP official said.

He further explained that interest rate for project loans will be dictated by the market for fixed or variable modes, while other fees include front-end and commitment fee.

Ninety percent of its total loan portfolio are developmental loans while the remaining 10 percent are commercial loans.

DBP can likewise still access P76 billion from ODA funds from multilateral credit agencies this year.