ENERGY SOURCE. President Ferdinand R. Marcos Jr. (center) graces the inauguration of the 160-megawatt Pagudpud Wind in Ilocos Norte on May 19, 2023. Also in photo are (from left) Ilocos Norte Vice Governor Cecilia Araneta-Marcos, Energy Secretary Raphael Lotilla, Ayala Corporation chair Jaime Augusto Zobel de Ayala and special advisor to the board Fernando Zobel de Ayala, Ilocos Norte 1st District Rep. Sandro Marcos and AC Energy president Eric Francia. (Courtesy of ACEN Facebook)

MANILA – The Ayala-led Bank of the Philippine Islands (BPI) is on track to retire coal financing in support of the country’s sustainability efforts.

In a briefing Friday night, chief finance officer and chief sustainability officer Eric Luchangco said BPI has not financed energy projects that utilize coal since 2018 or when the bank formalized its Sustainable Energy Finance (SEF).

“We don’t look necessarily at the percentage of our loan book, but if you look at where we are right now, over 50 percent of our energy portfolio is in renewable energy. That will continue to grow overtime,” Luchangco said.

He clarified that “the pace that we have is highly dependent on what the clients want to do” but stressed that they expect to be a leader in the market.

Among the energy projects the BPI is currently financing is for AC Energy (ACEN), another Ayala Group firm that is listed in the local bourse.

President Ferdinand Marcos Jr. graced the inauguration of ACEN’s 160-megawatt wind farm in Pagudpud, Ilocos Norte on May 19, located in the villages of Balaoi and Caunayan.

“We’re looking at all these new technologies. We continue to work on all of the sources of renewable… As I mentioned solar briefly, we are looking at improving the geothermal, our dams, maybe we can expand the hydrothermal power we get there,” the President said in his speech.

Luchangco said the bank led the first energy transition financing through AC Energy, which invested the fund that the bank extended to a renewable energy project and has committed to retire its coal-powered project 15 years early than its allowable period.

“That will take that capacity out of the market. And so it actually helps to reduce coal capacity. And that is a focus for us,” he said.

Luchangco said they could extend financing to corporates so they can transition to the use of LED lights and inverter air-conditioning units, among others.

He said they are also looking at financing energy projects that focus on the use of solar, wind, and biogas.

“We continue to forge in new boundaries and continue to look for activities that we can educate our clients. We’re doing these kinds of things and we’ll support you if you’re looking at doing something similar that’s why we do the sustainability fair today,” he added, referring to the bank’s sustainability fair that will run until Sunday at Glorietta Activity Center in Makati City.

BPI was the first to introduce SEF in the Philippine banking industry in 2008 to help finance green projects of the private sector, with focus on small and medium enterprises.

The green financing program expanded in 2019 to include sustainable agriculture alongside renewable energy, energy efficiency, and climate resilience under the rebranded Sustainable Development Finance program, which is also aimed at sustaining BPI’s commitment to the United Nations Sustainable Development Goals. (PNA)