Philippine bank establishes green finance framework

The green finance framework aims to promote the UN Sustainable Development Goals and is part of RCBC’s ongoing efforts to balance societal concerns with financial goals

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One of the Philippines' largest banks, Rizal Commercial Banking Corporation (RCBC), on January 14 announced the establishment of its green finance framework to provide the basis for the issuances of green bonds and loans, which can be denominated in pesos or in any other currency.

Proceeds from any green financing exercise under the framework will be used to finance or refinance a portfolio of green-eligible projects relating to renewable energy, green buildings, clean transportation, energy efficiency and pollution prevention and control that contributes to the reduction of the environmental footprint in the Philippines.

RCBC's green finance framework is the first in the Philippines to be aligned with the Asean Capital Market Forum's Asean green bond standards 2018. The framework is also aligned with the green bond principles 2018 of the International Capital Market Association and the green loan principles 2018 of the Loan Market Association and the Asia-Pacific Loan Market Association.

In setting up the framework, RCBC CEO Gil Buenaventura says the bank recognizes the importance of developing greater environmental awareness and social responsibility through its operations and the businesses it serves.

RCBC believes that balancing non-financial factors such as environmental and social issues with financial priorities is essential to good corporate citizenship and is fundamental to risk management and the protection of its investors and shareholders. The bank has been an active proponent in the renewable energy space, having provided substantial financing support to a number of landmark projects in the Philippines and the rest of Southeast Asia.

For instance, in August 2018, RCBC was tapped as the sole lender and RCBC Capital Corporation as the sole mandated arranger in the US$211.50 million project finance debt facility to fund the 300MW solar energy project of BIM Renewable Energy Joint Stock Company of Vietnam. The project is a joint venture between one of Vietnam's leading business groups BIM Group and AC Energy Holdings of the Philippines, and the transaction was the first major cross-border project finance deal by RCBC in Vietnam.

RCBC was also a lender in the Star Energy consortium's acquisition of Chevron's geothermal and power business in Indonesia and the Philippines in 2017.

Sustainalytics, a leading global provider of ESG research and rating, has reviewed the framework and concluded it is credible, robust and transparent. It is not only aligned with market best practices, but also contributes to the UN Sustainable Development Goals on affordable and clean energy, making cities and human settlements inclusive, safe, resilient and sustainable, and on responsible consumption and production

RCBC has mandated ING as the sole green structuring adviser for its green finance framework.

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Date

15 Jan 2019

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