IFC to back carbon emission reducing projects in Asia
The IFC has signed a memorandum of understanding with leasing firm Mitsubishi UFJ Lease & Finance Co. Ltd. to provide financing for projects that reduce greenhouse gas emissions and environmental pollution in Asian developing countries such as the Philippines, which will include geothermal projects.
Reported by Business World Online, “The International Finance Corporation (IFC) has signed a memorandum of understanding with leasing firm Mitsubishi UFJ Lease & Finance Co. Ltd. to provide financing for projects that reduce greenhouse gas emissions and environmental pollution in Asian developing countries such as the Philippines.”
This, according to the article will also include geothermal, and an example is mentioned in the US$ 82 million loan facility extended to EDC by the IFC in 2008.
The article continues saying that “the two institutions will provide funding support for energy efficiency initiatives, such as thermal insulation and high efficiency lighting systems in office buildings.
Financing will also be extended to projects that generate power from renewable energy sources such as wind, water, sun, geothermal or biomass. Technical upgrades that lead to lower use of materials and energy in industrial processes will also be eligible since these could minimize waste and emissions while maximizing productivity, the statement said.
Details on the amount of reserved financing and rules for eligibility were not immediately available, however.
The new leasing partnership will add to the environmental programs under IFC in the Philippines, including the Sustainable Energy Financing Program (SEFP) launched in 2008, which builds the capacities of local financial institutions to lend for sustainability projects.
IFC earlier said that “[d]ue to rising electricity costs and the looming power shortages throughout the country, there is an estimated $1-billion potential for local sustainable energy financing.”
Under the SEFP that provides credit lines and partial guarantees, commercial bank partners such as the Bank of the Philippine Islands and Metropolitan Bank and Trust Company have been able to upgrade the environmental systems found in manufacturing plants and electric cooperatives.
In 2008, IFC also signed a $82-million loan agreement with Energy Development Corporation, which accounts for 60% of the installed geothermal capacity in the country, for its acquisition of additional geothermal assets.
In describing the partnership with the Japanese leasing firm, IFC Executive Vice-President and CEO Lars Thunell said in a statement: “Mitsubishi UFJ Lease & Finance is an ideal partner…to assess clients’ financing and technology needs and to improve sustainable energy finance in developing countries.”
“IFC also sees opportunities for Mitsubishi UFJ Lease & Finance to collaborate with Japanese manufacturers and engineering companies in transferring their environmentally friendly production technologies to developing countries,” Mr. Thunell added.
For his part, President and CEO of Mitsubishi UFJ Lease & Finance Naotaka Obata was quoted as saying that “[p]artnering with IFC will help us enter new markets and provide new products to local customers for projects furthering environmental sustainability.”