Landbank lends P20 B for green energy projects (Sabong News)
Author
Lee C. Chipongian
Date
APRIL 27 2022
Government-owned Land Bank of the Philippines (Landbank) has released P20.1 billion loans for local renewable projects as of end March, according to its president and CEO Cecilia C. Borromeo.
The amount was availed of by 56 borrowers under Landbank’s Renewable Energy Program.
Borromeo on Wednesday, April 27, said the bank will further strengthen its loan program to promote environmentally sustainable projects that are crucial to global and local climate change issues.
Borromeo also said that since the state-controlled bank is at “the forefront of supporting initiatives aimed at protecting our environment” they will work more with their clients and customers, as well as development partners “towards a more sustainable future for the next generation and beyond.”
The bank’s Renewable Energy Program finance the development of renewable energy sources and increase access to reliable, clean and sustainable power to help mitigate the effects of climate change in the country.
It provides credit for working capital and also for capital expenditures. It will also finance project preparation activities such as developing a feasibility study, detailed engineering design, and supporting assessment studies, as well as securing permits, licenses, and approvals.
Landbank said term loans to be used for working capital are payable in five years with a six-month grace period on principal payment, while loans for capital expenditure are payable based on the borrower’s cash flow up to 15 years, with a three-year grace period.
Borrowers can take up to 90 percent of the total cost of the project. Cooperatives, associations and private borrowers categorized as single proprietorships, partnerships, or corporations may borrow up to 80 percent.
Renewable energy projects that the bank currently funds include harnessing biomass, geothermal, solar, hydro, ocean, and wind power. Other eligible projects include biofuel, hybrid renewable energy systems, such as hybrid electric or compressed natural gas, and the fabrication or manufacturing of renewable energy technologies, equipment and components, among others, said Landbank.
Usual borrowers are electric cooperatives, local government units, government-owned and controlled corporations and government agencies.
The Bangko Sentral ng Pilipinas (BSP) last February released the sustainable finance roadmap and guiding principles which were developed by the inter-agency technical working group on sustainable finance or the “Green Force”.
The BSP is encouraging all banks to explore and consider where applicable, the strategies, priorities, and principles outlined in the roadmap and guiding principles in developing their approach or actions towards adopting sustainable finance, said BSP Governor Benjamin E. Diokno. The BSP first issued the Sustainable Finance Framework in 2020.
Diokno said the country’s financial system in 2022 needs to have a better response to the climate crisis after the Philippines committed to reduce its carbon emissions by 75 percent by 2030 under the UN Framework Convention on Climate Change.
The BSP, with the Department of Finance, co-chairs the Green Force which is responsible for the roadmap “to bridge policy and regulatory gaps in promoting sustainable investments.”
