Banks extend loans to firms for energy efficiency projects

Being energy efficient is now a critical factor in a company’s competitiveness as well as national growth.

As a result, the banking sector is stepping up financial assistance for business enterprises.

About $378 million in loans were extended to corporations in the country since 2009, said Noel Verdote, operations officer of the International Finance Corp., the investment arm of the World Bank.

He said only two types of business in the Philippines seriously undertake energy efficiency measures in their operations – cement and steel manufacturing.

Others look at energy efficiency as just part of “housekeeping”.

“We need to make companies realize the potential savings they can get from implementing energy efficiency measures in their businesses,” said Verdote, speaking in yesterday’s 3rd Cebu Energy Efficiency Forum at the Radisson Blu Hotel.

“As of now, only ‘forward thinking’ companies consider energy efficiency a strategy for growth. We need to promote this further. There is opportunity here because this is the third resource we have instead of building more power plants,” Verdote said.

Three factors hold back companies from investing: It is not seen as a core business, the potential is underestimated and a turn-key package is lacking.

“What we do is make companies realize that there is actually potential, that energy efficiency is now a must in order to stay competitive and survive. There are banks that offer loans for energy efficiency projects,” said Verdote.

Loans were extended through four partner banks – Bank of the Philippine Islands (BPI), Banco de Oro (BDO), BPI-Globe Bangko, and China Bank through a program called Sustainable Energy Finance.

Allan Suarez, director of the European Chamber of Commerce and Industry, said the IFC is providing services to banking institutions to help them develop products for private corporations.

Companies in turn can access funds to implement energy efficiency programs in their businesses.

BPI senior vice president Mario B. Palou said BPI has assisted companies with an average loan size of P50 million.

“The biggest loan we have granted was P200 million and the companies are from medium to large corporations,” said Palou.

One company that availed of the SEF is Sheridan Resort and Hotel which set up wind turbines and solar panels in their property in Puerto Princesa, Palawan.

“We use a power generator to supply electricity which costs about P1.6 million or 180 kilowatts a month. Once the project is operational, we expect savings of at least 40 percent,” said Sheridan Resort and Hotels head of engineering, Engr. Edwin Severino.

In Cebu, BPI granted a loan to a manufacturing company to upgrade its equipment, which will boost the company’s capacity and will result in energy savings of about 30 percent.

In her keynote speech, Tourism Undersecretary Loreta G. Ayson cited various initiatives.

“Under our Government Energy Management Program, which aims to save 10 percent energy consumption in all government offices, we have already saved P2 billion from September 2005 to March 2012,” Ayson said.

Of that amount, P1.7 billion was saved from electricity and P274 million on fuel consumption.

Ayson said the government is adjusting its supply and demand projections since their last data based on a Gross Domestic Product (GDP) growth rate of 6.6 percent was obsolete given the current GDP of 7 to 8 percent.