IFC commits to invest $150 million in China Bank’s green bond

MANILA, Philippines — The International Finance Corp. (IFC) has committed to invest $150 million in a green bond issued by China Banking Corp., the proceeds of which would be used to fund climate-related projects.

This is the second green bond issued by a local commercial bank, following IFC’s  investment in the Mabuhay Bond issued by BDO Unibank in August, the first peso-denominated internationally-rated green bond.

Both BDO and China Bank are controlled by the SM Group of taipan Henry Sy.

“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,” said IFC CEO Philippe Le Houérou.

“Our investment in this bond will increase access to new financing for climate-smart projects. IFC is keen to provide investment and advisory support to develop innovative green financing products with private sector players who are committed to contribute to achieving sustainable economic growth in the Philippines,” he said.

IFC’s investment in China Bank would allow the bank to scale up its investments in projects that would support the attainment of the government’s target of a 70 percent reduction in greenhouse gas emissions by 2030. These cover projects in renewable energy, green buildings, energy efficiency and water conservation.

“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,” said William Whang, China Bank president.

China Bank and IFC first collaborated in 2012 on an advisory project for sustainable energy finance.

IFC is a member of the World bank Group focused on making investments in the private sector. It is currently one of the world’s largest financiers of climate-smart projects for developing countries.

During the fiscal year that ended on June 30, IFC has invested in 32 green bonds totalling $1.8 billion. This covers 52 projects for fiscal year 2018.

The portfolio is expected to reduce greenhouse gas emissions annually by 6.3 million metric tons of carbon-dioxide equivalent – an increase from 2.2 million metric tons in fiscal year 2017.