BDO avows to abandon funding new coal projects

BDO Unibank Inc. will stop financing new coal-fired power projects, a practice that the bank has put in place since 2019, one of the lender’s executives said.

In his keynote speech delivered last Thursday, BDO Senior Vice President and Head of Compliance Group Frederico P. Tancongco said the bank will continue its current practice of not lending to new coal-fired power plant capacity.

“Ultimately, BDO does not intend to finance any new capacity that will increase harmful greenhouse gas [GhG] emissions in the environment,” Tancongco said.

The executive added that BDO has committed to reduce its coal exposure by 50 percent by 2033, while ensuring that its coal exposure does not exceed 2 percent of its total loan portfolio by 2033.

The bank’s coal exposure, Tancongco clarified, does not include short-term working capital that power companies would need to transition out of the coal power business.

“BDO will support its customers’ transition to reduced carbon emissions by providing access to capital so they may invest in innovative technologies that will lessen their greenhouse gas emissions, or adapt their business to renewable energy alternatives,” he said.

“BDO will provide access to capital required by persons and businesses in communities negatively affected by the energy transition to low carbon emissions.”

Tancongco said, however, that in a situation where the Philippine government implements provisional emergency measures to address an energy crisis, or to the extent that the country’s energy resources can no longer meet its energy demand, BDO may reconsider extending capital for coal projects.

“We want to make our intentions very clear in taking steps to lower greenhouse emissions. We also want to be realistic in acknowledging what our energy experts and economists have been sharing for the past two years on energy security and how it may impact the economy and our people,” he said.

The bank also vowed to support the country’s ambitious goal for 75 percent reduction and avoidance of its greenhouse gas emissions by 2030.

“BDO will continue to expand its Sustainable Finance initiatives towards funding new and existing renewable energy projects to increase their capacity, and contribute to the country’s avoidance of GHG emissions,” he said.