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To encourage more investments in renewable energy projects in the Philippines, the International Finance Corp. (IFC) launched a program that would assist banks in moving loan financing away from the high energy consuming projects toward those favoring energy efficiency and emission reduction. IFC is the World Bank’s private sector lending arm.

The program is dubbed Sustainable Energy Finance Program. IFC country representative Jesse Ang said, “IFC’s program is based on the idea that financing sustainable energy projects can be good business while at the same time helping to combat climate change.”

With the Sustainable Energy Finance Program, the IFC will be providing financial and technical support, and it may also enter into risk-sharing agreements in selected cases. Ang said, “We will be providing money and know-how to Philippine banks so that they can provide capital to renewable energy and energy efficiency projects.”

IFC is also looking at working with end-users, service and technology providers, as well as engaging regulators to help create a policy environment that is conducive to sustainable energy investments. It will also help raise market and public awareness of the benefits of renewable energy.

The project will be financed by IFC through a $3-billion funding in the next two years, and it is funded by the Global Environment Facility. GEF is a global partnership among countries, international institutions, non-government organizations, and the private sector to address environmental issues.

The special financing program for sustainable energy is expected to boost the government’s effort to meet its goal of developing renewable energy sources, whose investment costs still remain high compared with fossil fuel-based power plants because of a limited market and intermittent generating capacity.

Ang said that they see tremendous opportunities on renewable energy in the Philippines, adding “We’re the second largest geothermal user in the world. We already have Northwind in the northern coast of Ilocos. And biomass, we’re an agricultural country and a lot of waste products in the agricultural area can be used for biomass.”