Landbank says loans for green energy projects reached P20B

The Land Bank of the Philippines on Wednesday said it has approved loans amounting to P20.1 billion to 56 borrowers in support of local renewable energy projects as of March 31, 2022.

In a statement, Landbank said the release of loans in line with the state-run lender’s commitment to sustainable development “as the country reels from the effects of changing global climates and shifting weather patterns.”

The bank said that through its Renewable Energy Program, it aims to finance the development of renewable energy sources and increase access to reliable, clean and sustainable power to help mitigate the effects of climate change in the country.

“As an industry leader in promoting environmental sustainability in the country, Landbank is at the forefront of supporting initiatives aimed at protecting our environment. We are looking to work with more customers and development partners towards a more sustainable future for the next generation, and beyond,” said Landbank president and CEO Cecilia Borromeo.

Landbank said its Renewable Energy Program can finance renewable energy projects harnessing biomass, geothermal, solar, hydro, ocean, and wind power.

Other eligible projects include biofuel, hybrid renewable energy systems, such as hybrid electric or compressed natural gas, and the fabrication or manufacturing of renewable energy technologies, equipment and components, among others, the bank said.

It added that aside from providing credit funds for working capital and for capital expenditures, loans under the program can also be used to finance project preparation activities such as developing a feasibility study, detailed engineering design, and supporting assessment studies, as well as securing permits, licenses, and approvals.

Eligible borrowers such as electric cooperatives, local government units (LGUs), government-owned and controlled corporations (GOCCs), and government agencies may borrow up to 90% of the total cost of the project, according to Landbank.

Meanwhile, cooperatives, associations and private borrowers categorized as single proprietorships, partnerships, or corporations may borrow up to 80%.

The state-run lender said that term loans for working capital and project preparation are payable up to five years, with a six-month grace period on principal payment, while loans for capital expenditure are payable based on the borrower’s cash flow up to 15 years, with a three-year grace period.

The interest rate shall be based on the prevailing market rate but not lower than 5% per annum. — Ted Cordero/RSJ, GMA News