Development Bank of the Philippines announced their Php 1 Billion “Cleaner Public Transport Financing program”. This program extends credit to credible financial institutions at 8% interest/year which in turn they can use to finance lending programs to transport groups seeking to comply with the Clean Air Act of the Philippines RA 8749. Up to 90% of the total project cost can be covered by the loan.
Financial Institutions which can apply for access to these funds for re-lending are:
Financing companies registered with the Securities and Exchange Commission (SEC), financial institutions, banks, non-government organizations, cooperatives, transport federations, and associations with at least two years of profitable lending operations.
Sample of green projects which can avail of these loans from the approved financial lenders are:
Acquisition of brand new vehicle (at least EURO 2 compliant); conversion of two-stroke to four-stroke engine for tricycles; retrofitting of engine; diesel particulate trap for buses and jeepneys; installation of catalytic converter; and use of alternative fuels such as compressed natural gas (CNG), liquefied petroleum gas (LPG), and bio-fuels.
Great news coming from the Philippine Financing Sector. With a lot of these environmental laws coming into effect one of the problems faced by the transport groups in terms of compliance is trying to access low interest funds that they can use to retrofit their fleet. Of course more often than not, the government always provides access to low interest financing via public banks for the affected sectors. And of course it is also usually stipulated in the Laws passed that credit be provided by the public institutions.
I would assume that this will be beneficial to both sides of the transaction as transport groups will do well to retrofit their fleets to more energy efficient devices to defray the high cost of fuel which in turn could guarantee them to pay off their loans and earn more in the process. Lender institutions are also always on the look out to lend money to chaps who are always sure of paying them back.
Source here.
Category: Green Financing
