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IFC invests in ‘green’ bonds of China Bank

World Bank unit sole investor in $150-M bond issue of the Sy bank
/ 05:09 AM October 20, 2018

China Banking Corp., which is part of the SM Group, raised $150 million through the issuance of its first green bond with the World Bank’s IFC being its sole investor.

The deal supports the continuing development of the nascent green bond market in the Philippines and the government’s target of reducing carbon emissions by 70 percent by 2030.

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“The $150-million bond proceeds will be used to finance climate-smart projects, including renewable energy, green buildings, energy efficiency and water conservation, in accordance with the Green Bond Principles,” China Bank said on Friday.

This green bond will bring up China Bank’s climate portfolio to over $200 million (about P11 billion), making it one of the market leaders for climate-smart financing in the country and one of a few banks that have established a clear sustainability strategy.

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“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 China Bank President William Whang said in a statement on Friday.

IFC is one of the world’s largest financiers of climate-smart projects for developing countries.

IFC, last August, issued Mabuhay Bonds, its first peso-denominated internationally-rated green bond.

In December last year, it subscribed to Sy-led BDO Unibank Inc.’s green bond issuance, its first green bond investment in a financial institution in East Asia and the Pacific.

The number of projects supported by IFC’s Green Bond Program has surged to 52 projects this year from 32 projects in 2017.

This was said to be an all-time high number and volume in terms of green bond-financed projects.

The portfolio is anticipated 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 2017.

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“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. Our investment in this bond will increase access to new financing for climate-smart projects,” IFC CEO Philippe Le Houérou said in the same statement.

China Bank and IFC first worked together in 2012 on a sustainable energy finance advisory project.

In 2017, China Bank participated in the mobilization of P796 billion in loans, bonds and securities for projects and investments that contribute to the UN Sustainable Development Goals.

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TAGS: China Banking Corp., SM Group, World Bank
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