The Ayala-led Bank of the Philippine Islands (BPI) will slash by half its financing for coal power-fired plants in the next five years.
“It is our intent to achieve zero coal in line with the Paris Agreement target of 2037 for non-OECD Asia,” said outgoing BPI president and CEO Cezar P. Consing, during the bank’s virtual annual stockholders meeting on Thursday.
“In fact, we believe that we will be able to half the amount of our outstanding coal loans by the end of 2026,” he added.
Consing was reacting a report by the Church-backed advocacy group Withdraw from Coal which tagged BPI as the biggest financier of coal-fired power plants in the country. BPI has bankrolled at least 15 coal power plants, the most recent of which is the P1 billion bond issuance for Aboitiz Power’s coal pants in Quezon, Davao and Cebu.
Under the Paris Agreement, an international treaty aimed to address climate change, the use of coal for power generation should peak by 2020 and significantly cut in the succeeding years.
It aims to cut by 80 percent below 2010 levels coal-fired power generation by 2030 and phase this out by 2040.
For Asian countries that are not members of the Organisation for Economic Co-operation and Development (OECD), the phase-out date is 2037.
Coal-fired power plants account for around 58 percent of the Philippines’ power source, followed by renewable energy (RE) and gas-fired power plants, both at 21 percent.
In terms of BPI’s loan portfolio for sustainable development projects, coal and diesel-fired power projects account for 45 percent, similar to the level extended for RE projects. The balance of 10 percent is accounted for by gas-fired power projects.
Based on its 2020 Integrated Report, BPI said sustainable development finance (SDF) for energy efficiency projects amounted to P835 million last year while it amounted to P47.8 million for RE projects and P6.9 billion for climate resilience projects.
It said the share of large-scale renewable projects handled by SDF accounted for the bulk of the bank’s clean energy financing portfolio.
“BPI aims to continue to respond to the energy needs of the country enriching its energy portfolio with more renewable energy projects. While we cannot yet fully abandon coal and non-renewable energy, because of the deficit in energy supply versus demand, we support the shift to renewable energy resources and energy efficiency,” it added. (PNA)