Publicly listed Metrobank had partnered up with the Sumitomo Mitsui Banking Corp (SMBC) of Japan for the development of a Clean Development Mechanism (CDM) project in the Philippines. Based from our understanding of the deal, SMBC will tap Metrobank’s extensive client base in the Philippines for subscription into the Carbon Credit Market.
Both banks are looking to tap into the Renewable Energy sector that was recently spurred by the passage and signing of the Philippine’s Renewable Energy Bill that seeks to give incentives to businesses that will put up renewable energy projects in the country. These businesses therefore make money, not just from their regular business model, but from the trading of their excess carbon units.
Aside from South East Asia, SMBC is continuously expanding its CDM project network with other banks in Europe, South America and Russia.
Metrobank is one of the largest banks in the Philippines. At one point holding the title of being the largest bank (in terms of assets) in the Philippines. The publicly listed bank is owned by the family of George Ty.
On a side note, check out the inspiring story of their Filipino Chair and Former president, Antonio Abacan Jr. On how he overcame poverty with hardwork and determination to be president of one of the biggest banking chains in the country.
Under the CDM, emissions per country will be capped on a per carbon unit basis. Businesses which expel a lot of carbon in the air and exceed their countries cap can buy carbon credits from other countries/businesses that do not exceed their cap or are into projects that reduce carbon emissions in the air (such as tree planting, alternative energy power etc).
Japan, being a highly industrialized country is poised to buy carbon credits in order to offset their emissions and it looks like the Metrobank-SMBC partnership is looking to fill that market.
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Category: Misc, Carbon Credits, Financing
