International Finance Corporation (IFC), a member of the World Bank group, has committed $150 million to a green bond issued by Philippine-based commercial lender China Banking Corporation (China Bank), becoming the sole investor in the bond.
Proceeds from the $150-million bond will be used to finance projects including renewable energy, green buildings, energy efficiency, and water conservation, in accordance with the Green Bond Principles, according to China Bank.
“IFC is proud to play a role in creating a new green bond market in the Philippines, a country challenged by climate change impacts but where green financing is low. Our investment in this bond will increase access to new financing for climate-smart projects,” said IFC’s CEO Philippe Le Houérou. The Philippine lender said that the green bond will bring up its climate portfolio to over $200 million, making it one of the market leaders for climate-smart financing in the country.
“The bond supports the continuing development of the nascent green bond market in the Philippines and the government’s target of reducing carbon emissions by 70 per cent by 2030,” China Bank said in a disclosure to the Philippine Stock Exchange on Friday.
IFC is one of the world’s largest financiers of climate-smart projects for developing countries. In August this year, it issued Mabuhay Bond, its first peso-denominated internationally-rated green bond. In December last year, it subscribed to BDO’s green bond issuance, its first green bond investment in a financial institution in East Asia and the Pacific.
In June, the IFC also became the sole investor in Thailand’s first financial institution-issued green bond via a $60-million investment in TMB Bank, one of the country’s leading banks. China Bank and IFC first worked together in 2012 on a sustainable energy finance advisory project. In 2017, China Bank participated in the mobilization of PHP796 billion ($14.8 billion) in loans, bonds, and securities for projects and investments that contribute to the UN Sustainable Development Goals.
“This bond affirms our long-term commitment to sustainability. We are glad to partner with IFC on our first green bond issuance to step-up our green lending activities and further contribute to a sustainable economy,” China Bank president William Whang said.
Source: Deal Street Asia