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||14 September 2009
Global lender to extend $20m energy fund to Philippines
The private investment arm of the World Bank will provide financing to Bank of the Philippine Islands (BPI) for building the lender’s sustainable energy portfolio, the Manila Times reported.
International Finance Corp (IFC) said on its website that the $20 million facility builds upon the Sustainable Energy Finance (SEF) Program launched last year.
The SEF program aims to establish partnerships with local banks using financial products and technical advisory to increase funding to renewable energy (RE) and energy efficiency (EE) projects.
Under the proposed terms of the facility, IFC said BPI would be responsible for generating a portfolio of loans that satisfy certain criteria that the lender and IFC would set after the appraisal.
With the assistance, BPI could expand its financial products by opening up opportunities for micro, small and medium enterprises to avail of loans for energy efficient operations. These include purchase of capital equipment like cooling systems, production machinery and lighting systems that are more energy-efficient.
Earlier, IFC said there is a 40-billion peso (1$=49 peso) market for this kind of lending in the Philippines that has yet to be tapped by commercial banks.
“IFC’s participation would involve guaranteeing the risk on 50 percent of that loan portfolio, which would include support from the Global Environment Facility [GEF],” the World Bank unit said.
“The risk sharing facility, combined with IFC’s technical support in the EE and RE sectors, will position BPI to lead the effort to provide much needed financing to companies in various industry sectors that will support EE and RE growth throughout the country,” IFC said.
It said the project would contribute to increasing efficiency in industry and reducing operating costs. In addition, the project will also contribute to pollution reduction by increasing use of more efficient technologies with fewer harmful side-effects.
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