Philippines offers at least $500m in green bonds to European investors

Philippine Finance Secretary Carlos Dominguez gestures as he listens to a question during a ‘Dutertenomics’ (Chairman Rodrigo Duterte Economics) forum at a hotel in Pasay City, metro Manila, Philippines April 18, 2017. REUTERS/Romeo Ranoco

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  • Final size, duration of sovereign bonds still to be determined
  • The Philippines plans to retire its coal-fired power plants

MANILA, Feb 18 (Reuters) – Philippine Finance Secretary Carlos Dominguez has sought support from European investors for an initial government green bond offering worth at least $500 million, to raise capital. funds for clean energy projects, his department said Friday.

Dominguez in a press release said that the sale of these debt securities, known as environmental, social and governance (ESG) sovereign bonds, will take place “in the coming weeks”.

The Southeast Asian country is aiming for a 75% reduction in greenhouse gas emissions by 2030 as part of its commitment to the Paris Agreement on climate change, a more ambitious target than its previous reduction target of 70% set a few years ago. Read more

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To help achieve the goal, it plans to phase out its coal-fired power plants and seek more investment in renewables.

Dominguez said the Philippines was committed to moving forward with its emissions reduction target, but stressed that financial support from wealthier countries was needed.

On Thursday, he said the government was in talks with various banks on the appropriate structure for the green bond offering, and was “looking at a window of opportunity in different currency markets.” Read more

He did not name the banks, but fixed-income news provider IFR reported on Wednesday that the government had tapped Bank of China, Citigroup, Credit Suisse (CSGN.S), Deutsche Bank (DBKGn .DE), Goldman Sachs (GS.N), Mizuho Bank, Morgan Stanley (MS.N), Standard Chartered (STAN.L) and UBS (UBSG.S) for a potential bond supply of 1 to 2 billion dollars in ESG format.

With its first offering, the government is following in the footsteps of Philippine companies that had tapped green bond markets in recent years, including BDO Unibank Inc (BDO.PS) and Ayala Corp’s power unit AC Energy Corp ( ACEN.PS).

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Reporting by Enrico Dela Cruz; Editing by Martin Petty

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