Philippines’ new sustainability framework restricts fossil fuel financing

Fossil fuel power-generation projects will be excluded from its green financing scheme.

The Philippine government will be excluding projects related to fossil fuel power generation from its new green financing scheme.

This is in line with its commitments to sustainable development as well as the United Nations Sustainable Development Goals.

The exclusion will also cover the exploration, production or transportation of fossil fuel, according to Sustainable Finance Framework.

Under the Framework, the Philippine government plans to raise green, social or sustainability bonds and loans amongst others for projects that support renewable energy sources.

This includes manufacturing, development, installation, operation, transmission, and distribution of solar, wind, geothermal, biomass and hydropower.

It noted that for bioenergy, the government will ensure that it will not come from sources that deplete existing terrestrial carbon pools.

Moreover, the projects must protect biodiversity and should not involve the burning of peat, the Framework read in part.

The Framework also provided for social projects that will provide access to education, basic infrastructure, food security, jobs, and affordable housing amongst others.

The Philippines has so far committed to reduce its carbon emissions by 75% by 2030. In November, it has also joined the Asian Development Bank, and Indonesia in launching the Energy Transition Mechanism which sought to accelerate the retirement of coal-fired power plants in the country.