MANILA, Philippines — The private sector arm of the World Bank Group is investing $100 million in the maiden blue bond issuance of BDO Unibank to address marine pollution and support climate goals.
The International Finance Corp. of the World Bank Group has subscribed to BDO’s blue bond, the first of such issuance in the country. It is also the first for IFC in the East Asia-Pacific region.
IFC’s investment is expected to increase access to finance for blue projects in the Philippines to address marine pollution and preserve clean water resources while supporting the country’s climate goals.
“IFC’s investment will be key to helping BDO develop a blue finance framework that will allow us to fund projects that support the country’s blue economy while establishing a new asset class in the Philippine debt market,” BDO chairperson Teresita Sy-Coson said.
She said the blue bond issuance reinforces BDO’s commitment to sustainable financing and allows the country’s largest bank to boost support on water conservation, wastewater treatment, plastic recycling, sustainable tourism, fisheries and sustainable seafood processing.
Solid waste management and marine plastics are key issues for the Philippines, threatening several elements of the blue economy as well as urban public health.
It is estimated that plastics account for 80 percent of all marine debris in the oceans and Southeast Asia alone generates more than 31 million metric tons of plastic waste.
Some 4.8 million to 12.7 million MT of plastic leak into oceans each year with the whole of Asia contributing to over 80 percent of the marine leakage.
Unfortunately, the Philippines is the third largest contributor, with an estimated 750,000 MT of mismanaged plastic entering the ocean every year.
The country is also dealing with water stress amid rapid urbanization. Over three million Filipinos rely on unsafe and unsustainable water sources while seven million lack access to improved sanitation.
IFC Philippines country manager Jean Marc Arbogast said that a blue bond instrument would be key to the Philippine growth trajectory.
“Moving forward, a robust blue economy will help create jobs and alleviate poverty while strengthening the marine ecosystem in the Philippines,” he said.
The BDO blue bond will adhere to the International Capital Market Association Green Bond Principle and IFC’s recently launched blue finance guidelines.
IFC will also help BDO identify projects that can be funded by the blue bond while building its capacity in terms of monitoring the impact.