Yuchengco-led Rizal Commercial Banking Corporation (RCBC) will be focusing its lending projects on at least 1,600 megawatts (MW) of renewable energy (RE) projects over the next two years.
RCBC Corporate Banking Group Head Beth Coronel said in a Manila Bulletin report that around 70% of the bank’s loan projects will be allotted for solar farm projects, while the balance will be for wind, geothermal, and hydropower projects.
Coronel added that RCBC typically funds 70% of the project cost, while the balance will be taken up by their equity partners.
The loan tenor can be assured between five to 15 years, which includes a reasonable, pre-agreed grace period on the principal and is priced based on a spread over an accepted benchmark that is reflective of market conditions.
While one of the bank’s requirements in funding RE projects is being fully contracted, RCBC said that projects on a ‘merchant basis’ can be funded if the known risks are addressed. Coronel added that the bank and the company would need to arrive “at a mutually acceptable structure” in said cases.
She added that RCBC has been “funding partially contracted projects” when the feed-in-tariff (FIT) system incentive was enforced during the 2014 to 2016 series of projects.
Aside from RCBC, Sy-led BDO Unibank – the country’s largest bank – will also be funding RE projects, preferably those in the execution stage, as the government is looking to increase the minimum requirement under the Renewable Portfolio Standards.
Government-owned Development Bank of the Philippines has also launched its Solar Merchant Power Plant Financing Program to support the funding of power developers who intend to sell power through the Wholesale Electricity Spot Market.