Philippines seeks European investors’ support for green bonds
The Department of Finance (DoF) has pitched its maiden green bonds set to be offered “in the coming weeks” to European investors as the government seeks to finance clean energy projects.
In a news release, the DoF said Finance Secretary Carlos G. Dominguez III sought European investor support for the Philippines’ maiden green bond offering of at least $500 million.
The offering will raise funds for the Philippines’ clean energy projects and other climate change mitigation initiatives.
Mr. Dominguez said the offering is one of several government initiatives to fight climate change after wealthier economies failed to fulfill a $100 billion pledge to help developing nations tackle climate change each year by 2020.
“We cannot wait for the bureaucrats in the industrialized world to take their sweet time splitting hairs on the idea that the countries that polluted and continue to pollute the most must bear the greater part of the financial burden of reversing global warming that they started 175 years ago,” he told the European Chamber of Commerce of the Philippines in a recorded message.
“This is, for us, the essential meaning of climate justice.”
Funds raised from green bonds are used for climate mitigation and environmental projects.
Mr. Dominguez recently said that the DoF is in talks with banks on the appropriate structure of its maiden ESG (environmental, social, and governance) offering. The department is assessing the size, tenor, and currency markets.
On Wednesday, fixed-income news provider IFR reported the Philippines had mandated Bank of China, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Mizuho Bank, Morgan Stanley, Standard Chartered and UBS for a potential US dollar bond offering in the ESG format.
Citing a source aware of the development, IFR said the Philippines was looking to raise $1 billion to $2 billion from medium- to long-term bonds.
“The timing of the issue, of course, will depend on prevailing market conditions and investor sentiments,” Mr. Dominguez told CNBC on Friday.
“We are in deep conversation with our bankers, and as soon as the market conditions are ready, we will make the appropriate announcement as to the exact timing and size of our sustainability bond issue.”
The Philippines has committed to reduce greenhouse gas emissions by 75% from 2020 to 2030. Of the 75% target, just 2.71% can be achieved with internal resources, while the remaining 72.29% is conditional on international assistance.
China emitted 27% of the world’s greenhouse gas total in 2019, followed by the US at 11% and India at 6.6%, think tank Rhodium Group said.
“We are disappointed, however, that the Western countries with the greatest volume of emissions were far less ambitious in their commitments to the global effort to rescue the planet. This includes many European countries,” Mr. Dominguez said. — Jenina P. Ibañez
