BDO Unibank, Inc. (BDO) completed on Friday the issue of “green bonds” to the World Bank’s private investment arm International Finance Corp., to help the bank expand lending to climate change-mitigation projects.

In a disclosure, BDO raised $150 million, which is intended to finance renewable energy projects, green buildings, and energy-efficient equipment, among others, from sole investor IFC.

This is the first green bond issued by a commercial bank in the Philippines, as well as IFC’s first green bond investment in a financial institution in East Asia and the Pacific.

The bank said that the deployment of the proceeds is expected to help save 93,000 tons of carbon emissions annually by 2022, and will contribute to the Philippines’ goal to reduce carbon emissions by 70% by 2030.

“Climate change is a very real concern in the Philippines. It is one of the most vulnerable countries globally to the impact of such changes. This bond demonstrates our corporate commitment to come up with business solutions to address the challenges of sustainability,” BDO president and chief executive officer Nestor V. Tan said.

“This also aligns with our goal of growing BDO’s climate business, and ultimately, fostering the nascent climate finance market in the country. We are glad to partner with IFC, a global expert in green finance,” he added.

IFC Director for East Asia and the Pacific Vivek Pathak said: “The issuance is an example of BDO’s leadership in developing climate finance in the country. By building on our long-term partnership with BDO, we aim to create a vibrant green bond market in the country and stimulate private sector investment in renewable energy and energy efficiency.”

“Further, by setting the standard and the benchmark for green bonds issued in accordance with the Green Bond Principles which IFC helped develop, we hope to pave the way for other issuers and investors to access financing through this product, at a time when demand for green infrastructure and other sustainable investments are high,” added Mr. Pathak.

The issuance is a culmination of an advisory engagement on sustainable energy finance between IFC and BDO that started in 2010, and helped establish sustainable energy finance as a core part of the bank’s sustainability strategy.

The bank said that it expanded its climate-smart portfolio from zero to over $500 million, which made it the country’s market leader in climate financing.

IFC is a global development institution belonging to the World Bank Group.

It is one of the world’s largest backers of climate-smart projects for developing countries. Since 2005, IFC has invested $18.3 billion in long-term financing on its own account, and mobilized another $11 billion through partnerships with investors for climate-related projects.

IFC has issued a total of $7.25 billion in green bonds in 12 currencies, which are all part of a its global strategy to develop the green bond asset class in emerging markets.

BDO reported a net profit of P20.4-billion in the nine months to September, up 5%.

BDO closed at P148 on Friday, up P2 pesos or 1.37%. — Elijah Joseph C. Tubayan

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