BDO issues USD150-M ‘green bond’ to curb climate change

Proceeds from the bond sale will be used to fund climate-smart projects, such as renewable energy, green building, and energy-efficient equipment, it said. (Photo: By Hans Olav Lien – Own work, CC BY-SA 3.0)

MANILA— BDO Unibank Inc. is pioneering the issuance of so-called green bonds among Philippine commercial banks, after recently raising USD150 million from the activity and allotting all the proceeds to fund projects aimed at curbing climate change.

In a disclosure to the Philippine Stock Exchange (PSE) Friday, the bank owned by taipan Henry Sy said the World Bank Group’s investment arm, the International Finance Corp.

(IFC), is the sole investor in the green bond.

Proceeds from the bond sale will be used to fund climate-smart projects, such as renewable energy, green building, and energy-efficient equipment, it said.

BDO President and CEO Nestor V. Tan said in the disclosure that “climate change is a very real concern in the Philippines,” citing that the country “is one of the most vulnerable countries globally to the impacts of such change.”

“This bond demonstrates our corporate commitment to come up with business solutions to address the challenges of sustainability. 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 said.

BDO and IFC started the advisory engagement for the green bond in 2010, and this paved the way for the bank to include sustainable energy financing as part of its core business.

To date, the bank has extended more than USD500 million for its climate-smart portfolio.

The latest issuance, the bank said, “is expected to help save 93,000 tons of C02 (carbon dioxide) emissions per year by 2022.”

IFC Director for East Asia and the Pacific Vivek Pathak, in the same disclosure, said BDO’s latest green bond issuance shows the bank’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,” he said.

“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,” he added.