RIZAL Commercial Banking Corp. (RCBC) announced last Wednesday it is set to zero out its remaining existing exposure on coal-fired power plants by 2031.
The Yuchengco-led bank said the move is consistent with its earlier announcement to cease funding of new coal power plants.
“As part of RCBC’s commitment to the environment and to the world we all live in, we are phasing out lending to coal-fired power plants by 2031,” RCBC President and CEO Eugene S. Acevedo said.
“A call to be part of the net zero revolution has started. Businesses need to redouble efforts in order to reach net zero,” Acevedo added. “Much more needs to be learned on how sustainable finance can contribute to this.”
In December 2020, RCBC became the first local commercial bank to officially end extending financing to new coal-fired power projects, following the Department of Energy’s imposition of a nationwide moratorium on coal.
Acevedo said that in terms of funding energy projects then, the bank has been focusing on renewable energy since 2012. The bank’s coal exposure is amortizing every year and will decline until it zeroes out in 2031.
Currently, RCBC is poised to close funding deals on renewable energy projects with a combined capacity of 1.6 gigawatts (GW). This is on top of the 3.06-GW worth of renewable energy projects that the company has already supported since 2012.
Elizabeth E. Coronel, head of the RCBC Corporate Banking Group, said the lender aims to close these new renewable energy deals–a combination of solar, wind, hydro and geothermal projects–in the next 12 months to 24 months.
From 2019 to 2021, RCBC issued roughly $1.1 billion of funding under its Sustainable Finance Framework. As of June last year, about 10 percent of the bank’s loan portfolio is eligible under sustainable financing.
Earlier this year, RCBC also began offering the first-ever environment-related time deposit in the Philippines.