Lotilla lauds BSP green lending

MANILA, Philippines — Energy Secretary Raphael Lotilla has lauded the Bangko Sentral ng Pilipinas (BSP)’s move to allow banks to expand financing for sustainable energy projects, including transition financing for decarbonization.

According to the Department of Energy (DOE), the BSP hiked the single borrower’s limit for green loans by 15 percent and reduced gradually the applicable reserve requirement for green bonds from the current three percent to zero percent over a two-year period.

Lotilla said the move complements the strategies implemented by the Department of Energy (DOE) to accelerate the Philippine Energy Transition Program pursuant to the instructions of President Marcos.

He said among these strategies are the deployment of renewable energy projects to bring to at least 35 percent the share of renewable energy in electricity generation by 2030 and 50 percent by 2040, as well as the development of a green and smart grid  to accommodate and manage the additional renewable energy capacity that will come online.

Also included in the DOE’s strategies are building and expanding the necessary port infrastructure to support offshore wind and other marine-based energy resource development projects, and providing an avenue for voluntary early decommissioning or repurposing of existing coal-fired power plants.

“These would entail big investments where private sector funds, including equity investments, green bonds or loans would be needed,” Lotilla said.

“We are, therefore, pleased with this development noting that clean energy investments over the next decade will be carried out by the private developers,” he said.

The DOE said universal and commercial banks have financed or approved loans supporting green or sustainable projects, such as renewable energy, energy efficiency and green buildings.

Aside from the BSP, Lotilla likewise lauded the earlier action of the Board of Investments for providing income tax holiday incentives for own use renewable energy and energy efficiency projects, as well as duty exemption on importation of capital equipment, raw materials, spare parts, or accessories.

“This would certainly aid energy efficient projects which will ultimately redound to the benefit of consumers. The tax incentives will result in increased economic activity and the potential to generate more jobs,” he said.

Lotilla noted that all these actions show that the government is working harmoniously in order to move forward the country’s energy transition program.