While AboitizPower stated last month that fundraising activities for its Therma Visayas Inc.’s (TVI) expansion are underway, and that the banks that supported TVI’s Units 1 and 2 “seem okay and willing” to lend for its new Unit 3, at least four top domestic banks reiterated their policies of not supporting additional coal, including TVI’s expansion project in Toledo, Cebu.
BDO Unibank, Bank of the Philippine Islands, Security Bank, and the Development Bank of the Philippines—who previously supported TVI’s two units—reiterated their coal exclusion policies that deter financing for new coal capacity in correspondence with the Withdraw from Coal: End Fossil Fuels (WFC:EFF), a coalition of environmentalists, faith leaders, and other sectoral groups.
“BDO is not financing this (TVI Unit 3) project and we are not among the banks that have expressed interest in doing so,” said BDO Unibank Vice President and Chief Sustainability Officer (CSO) Marla Alvarez in an email last week. The bank has ceased lending in additional coal capacity since 2022, and has committed that its coal exposure will not exceed 2% by 2033.
BPI, the first domestic private bank to publicly announce its commitment to stop financing greenfield coal projects and to zero coal exposure by 2032, also reiterated its policy: “We at BPI remain steadfast in our commitment not to finance any new greenfield coal power generation projects, and a new expansion unit, even if to an existing plant, is covered under BPI’s existing coal policy,” said Eric Luchangco, BPI’s Chief Finance Officer and CSO.
Security Bank also stated that it will not be participating in the expansion project in line with their 2022 commitment to no longer finance new coal generation projects, and to wind down existing exposures by 2033. Meanwhile, state-owned development bank DBP also reaffirmed its 2017 policy of putting coal power facilities on its negative list. “As of to date, DBP’s existing policy putting coal power on a negative list remains in full force and effect,” said DBP Vice President Rustico Noli D. Cruz.
Landbank of the Philippines, which also financed TVI’s existing units before, has coal exclusion policies but is yet to confirm nor deny participation in the Toledo coal expansion. Landbank in 2023, included power plants with greenfield status and those that will be newly constructed in its negative/exclusion list. This year, however, the bank clarified that its coal financing policy will follow the Department of Energy’s coal moratorium.
Groups and communities have previously protested AboitizPower’s expansion plan of the Toledo Power Plant due to its adverse effect on residents and the environment. Graft charges have also been filed against Energy Secretary Raphael Lotilla due to his endorsement of TVI’s Unit 3 despite the expansion contravening the 2020 coal moratorium.
“The banks’ unwillingness to back the expansion unit of TVI should already be a hint to Aboitiz that building another coal plant would be a losing game—financially, environmentally, and even with regards to the country’s sustainable energy needs,” said Gerry Arances, co-convenor of the WFC:EFF.
Arances also urged Philippine banks to shift support from coal and gas to renewable energy, amid the world’s commitment to transition away from fossil fuels. Southeast Asian (SEA) banks, including BPI, are leading the rally for renewable energy funding, data by the Center for Energy, Ecology, and Development (CEED) shows. In a new report, CEED found that while fossil fuel expansion remains in the region, primarily pushed by the Global North, SEA has a massive 397.8 gigawatts of renewables capacity in the pipeline.
That top banks are backing out of the expansion project is a signal for the whole banking and financing community to also do the same. “With the disappointing outcome of the COP29, which did not double down on phasing out fossil fuels and only offered measly financing for developing countries, there is an increasing imperative for the fossil fuel industry and financing institutions to pivot from coal and gas, and re-channel resources to RE. This transition is especially important for the climate-vulnerable Philippines, which is experiencing one climate disaster after another,” said Bishop Gerardo Alminaza, lead convenor of the EcoConvergence National Hub.
Along with Bishop Alminaza, several environmental groups have launched the “Save Tañon Strait” campaign in September to protect the largest marine protected area in the country from the impacts an additional unit of TVI coal facility will make.
