MANILA, Philippines — Security Bank Corp. aims to “nearly double” its lending by the end of next year as the bank sees growing interest in renewable energy infrastructure development in the country in line with the government’s energy transition targets.
Eduardo Olbes, Security Bank’s chief financial officer, told reporters on Wednesday that they were targeting P40 billion in new loans within the next two years, coming from the P43.6 billion total as of last year. The bulk of these new loans would largely be skewed toward renewables, he said.
“If clients are comfortable developing renewable energy projects, we’re happy to provide financing,” Olbes said, adding that they were also seeing higher demand for auto loans, as more clients shifted toward electric vehicles.
“It depends, though, on client demand, but our ambition is to generate incremental P40 billion [in loans] through all of those means,” he added.
Mix of wind and solar projects
Nearly half of Security Bank’s total qualified green and social loans last year were for renewable energy projects, totaling P20.6 billion.
Basic infrastructure accounted for P14.3 billion; green buildings, P6.6 billion, and essential services, P2.1 billion.
According to Olbes, they expect a “substantial amount” of their P40-billion goal to be achieved within this year, seeing that they have “quite a healthy pipeline on the renewable side.”
“It’s a mix of both wind and solar [projects]. That is the lion’s share of the pipeline that we see,” he said.
Overall, Security Bank is likewise expecting heightened demand for renewable energy-related loans in the country, especially as power demand increases steadily yearly, Olbes explained.
Energy mix
The national government aims to increase the share of renewables in the country’s energy mix to 35 percent by 2030 and 50 percent by 2040.
READ: To hit an ambitious energy mix goal, PH needs 53,000 MW of clean power
As of the first quarter, renewables account for at least 29 percent of the total mix, while coal remains the dominant source at around 40 percent.
In an April 2024 report, nongovernment organization Center for Energy, Ecology and Development (CEED) found that 15 of the country’s largest banks lent $8 billion for renewable energy projects from 2009 to 2023.
The coal industry, meanwhile, received $15 billion during the same period, CEED pointed out.
For their part, Olbes said Security Bank was “no longer extending financing” toward new coal projects.
“We are directing a significant amount of resources toward growing the country’s renewable energy base,” he said.