Government-owned Land Bank of the Philippines headed by bankero Cecilia Borromeo has approved P20.1 billion worth of loans to bankroll renewable energy projects as the country reels from the effects of changing global climates and shifting weather patterns.
“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,” the bankero said.
The loans were extended to 56 borrowers as of end March, underscoring Landbank’s commitment to sustainable development.
Through the Landbank Renewable Energy Program, the bank 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.
The program finances 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.
Aside from providing credit fund 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.
Cooperatives, associations and private borrowers categorized as single proprietorships, partnerships, or corporations may borrow up to 80 percent.
Term loans with interest based on prevailing market rate but not lower than five percent 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.