MANILA, Philippines--International Finance Corp. (IFC), an arm of the World Bank, has approved a loan to fund reconstruction of portions of Marikina, which was devastated by floods in the aftermath of Tropical Storm “Ondoy.”

The loan, amounting to P300 million, is earmarked for the construction of a dike and the rehabilitation of flood-damaged major roads and other facilities.

Portions of the loan will also be used to fund infrastructure work on the Pamantasan ng Lungsod ng Marikina.

The Bangko Sentral ng Pilipinas, in charge of managing liquidity, has already given the green light for the acceptance of the loan by the city government of Marikina.

According to a source from the central bank, the loan will be payable in 10 years and shall carry an interest rate equivalent to the rate of a benchmark 10-year peso loan plus a spread of 2.6 percent. Interest payments shall be done semi-annually.

This is the first time IFC will be lending to a local government unit. Usually, the IFC lends to private sector entities.

Marikina was one of the most seriously damaged cities by Ondoy, which was estimated to have caused the deaths of more than 400 people and destroyed billions of pesos worth of property in Metro Manila and nearby provinces.

Environmental experts said the storm, which brought unprecedented rainfall, was caused by climate change, which in turn is a consequence of carbon emissions.

President Macapagal-Arroyo earlier said the Philippines should be compensated for the damage caused by Ondoy, stressing that climate change principally stemmed from the carbon emissions of industrialized countries.

According to estimates by environmental experts, the Philippines only contributes 0.2 percent of total carbon emissions in the world.

Many countries and foreign funding institutions, including the United Nations and Asian Development Bank, responded favorably to the government’s call for assistance.