renewable energy

A LOCAL BANK’S
PERSPECTIVE ON
GOING GREEN
Eduardo V. Francisco | 02 October 2012

OUTLINE
• BDO's Greening Internal Program
• BDO Sustainable Energy Finance Program
• Phil. Renewable Energy and Pipeline
• Contact Details
2

BDO GREENING PROGRAM

INTRODUCTION
INTRODUCTION
Introduction: The BDO Greening Program is a new
project of the bank that promotes
awareness among officers and staff on the
importance of environmental sustainability
as a critical issue of the 21 st century. It
aims to educate employees and institute
sustainability principles and green office
guidelines.
It hopes to harness the commitment of
each employee to adopt a more
responsible lifestyle in and out of the
office; starting from little, everyday things.
In so doing, individual employees will
realize that individual actions are needed
to help BDO reduce its collective
environmental impact.
4

OBJECTIVES
Objectives:
To increase awareness among officers and staff on the
importance of environmental sustainability (“green initiatives”)
as a critical issue of the 21 st century.
To promote green initiatives in day-to-day bank activities,
particularly in the areas of reducing energy, paper and water
consumption
To identify green advocacies and activities and promote
volunteerism outside of the bank environment.
5

THE MAIN AREAS OF ACTION
Objectives:
Awareness and
Communication
Work plans and
Initiatives
Volunteerism and
Participation
1. Lecture Series
2. Info Campaign
Internal Bank
Activities
1. Appreciation Tour
2. Tree Planting
6

Awareness and Communication
Lecture Series
AWARENESS & COMMUNICATION
LECTURE SERIES
LECTURE SERIES
Launch/Intro
BDO Greening Program
Film Showing:
Signos
About Plants
About Energy
About Water
Waste Management
Key concepts on
Ecology, Ecosystems and
The Environment
Energy Efficiency and
Your Business
Water Conservation
Measures
Paper: An Overview
Degradation of Mangroves
Measuring & Managing
Carbon Footprints
Cost Benefit Analysis
& Environmental
Assessment
Rethink, Recycle &
Reuse
Mitigation/Adaptation
Strategies
7

AWARENESS & COMMUNICATION
INFO CAMPAIGN
# Greening Info Campaign
01 Flyer/teaser to get pledge and support of employees
02 Email Blasts of Greening Tips (see list)
03
Email Signature: a line below the person’s info – “Do not print this email
unless absolutely necessary. Spread environmental awareness.”
04 Computer Pop Up – GO Green!!
05 BDO Greening Program Intranet Site
06
07
08
Merchandising Materials:
GO Green Mugs
GO Green Mascot
Posters/Stickers:
• Stickers “Conserve Water” in CR nera faucets
• Stickers “Think before you print” in fax, photo copiers and printers:
Facts: Cost of Electricity; Energy Savings Tips
Publication:
Newsletter Feature of Success Stories
Green Corner
8

AWARENESS & COMMUNICATION
Awareness and Communication (Info Campaign)
INFO CAMPAIGN
Flyer#
Greening Topics/Issues
01 The office environment trail: We are all part of the solution
02 Tour of the workplace: What’s in the bin
03 Facts on daily solid wastes; One Less Bottle:
04 Facts: Lost Trees; Tips to reduce paper usage
05 Facts: Life of Paper; Green Meetings
06 Facts: Life of Plastic; Green Choices
07 Facts: Cost of Electricity; Energy Savings Tips
08 Facts: Cost of Water; Saving Tips
9

WORKABLE ACTION PLANS & INITIATIVES
Workable Action Plans and Initiatives
Activity
Email signature
Pop up
Lights Out!
Unplug It!
e-Gadgets
Recycling the
printer cartridges
Remarks
Put below signature line in lotus notes of employees,
“Do not print this email unless absolutely necessary.
Spread environmental awareness.” A Pop Up on the
greening program as a regular reminder will also be
installed in PCs. Both to be done in coordination
with IT.
Encourage employees to turn off lights when leaving
the office. Involve PMD.
Encourage employees to unplug appliances PC,
water dispenser, water fountain, photo copiers,
printers, etc. Involve PMD.
Recycling of used electronic gadgets like cell phones
in coordination with Nokia. Recycling bins will be
placed in two towers for a specific period.
To facilitate ink cartridge collection, coordinate with
Procurement to require requesting unit to surrender
empty ink cartridges before issuing the replacement.
Empty ink cartridges will be sold back or surrendered
to Canon
10

VOLUNTEERISM & PARTICIPATION
Volunteerism and Participation (Advocacies)
(ADVOCACIES)
1. Tree Planting at Marikina Watershed.
Involve the BDO Mountaineering and
Explorers Club (MEC) and BDO Camera Club.
To be scheduled during the rainy months –
October
2. Coastal Clean-up: To have a better
appreciation of the environmental efforts of the
bank – Conduct/organize a Coastal Cleanup in
Manila Bay near Mall of Asia. Get involvement
of BDO Scuba Diving Club
3. Encourage provincial branches to organize
their own volunteer activities, e.g. tour of
Northwind Energy Development Corp in
Bangui Bay, Ilocos or Bac-Man Geothermal
Plant in Bicol Region, etc.
11

VOLUNTEERISM & PARTICIPATION
(ADVOCACIES)
Other Options:
1. Lecture/tour of Toyota Plant in Sta. Rosa, Laguna, Shell Plant
or Petron Plant on proper disposal of petrol and other waste
materials and their environmental programs.
2. Lecture/visit of Botanical Gardens with discussion on plants
and its proper handling/care.
3. Beach clean-up at Anilao Dive Resort.
4. Organize a “Best Green Initiatives Contest.”
12

SUGGESTED MARKETING ITEMS
White mug at Php90.00 and may retail at Php150.00. Proceeds
will go to Marikina Watershed Project.
13

BDO’S SUSTAINABLE ENERGY
FINANCE (SEF) PROGRAM

FEATURES OF THE PROGRAM
In March 2010, BDO signed a Cooperation
Agreement with the International Finance
Corporation (IFC) to facilitate the financing of
energy efficiency and renewable energy
investment projects. IFC will provide advisory
and capacity building services to BDO to develop
and promote sustainable energy financing.
Sustainable energy projects include investments
in energy efficiency (EE) and renewable energy
(RE) projects (below 15 MW).
15

FEATURES OF THE PROGRAM
IFC and EE/RE consultants will assist the Bank
in the appraisal and evaluation of specific market
segments, technologies and projects involving
EE and RE investments. This enhances the
Bank’s capacity- building efforts in managing
sustainable energy portfolio.
IFC is providing the Bank advisory services in
the following areas:
• Support in market identification – IFC will assist
the Bank in developing strategy for EE and RE
financing and in identifying specific target
market.
16

FEATURES OF THE PROGRAM
• Capacity building for Bank staff – IFC will
conduct training and workshops for Bank
officers in the following areas: technical and
financial evaluation of EE and RE projects; risk
evaluation and management; project and
program monitoring.
• Specific market research – Conduct of market
studies on specific market segments which
BDO would require from IFC. IFC will also
provide BDO with all scoping studies already
completed by IFC.
17

FEATURES OF THE PROGRAM
• Relationship brokering – IFC will assist in
identifying equipment suppliers and energy
service companies (ESCOs) for the
development of BDO’s pipeline projects.
• Marketing support – Assist BDO in developing
the marketing and awareness campaign for its
sustainable energy finance program.
18

FEATURES OF THE PROGRAM
• Energy efficiency and renewable energy
calculators – IFC will provide energy efficiency
and renewable energy calculators to help the
Bank officers evaluate energy efficiency and
renewable energy projects. This is in
conjunction with the training on technical and
financial evaluation of EE and RE projects.
19

BENEFITS TO CLIENTS
BDO provides free-of-charge energy walkthrough
audit to assess client’s plant facilities and
presents audit findings, EE solutions if any, and
computation of energy savings. If client needs
financial assistance, BDO can provide financing
for the EE investment.
For RE projects, RE consultant will prepare
technical evaluation of the project and can
provide advisory services to clients in the area of
technology and feedstock (for biomass projects)
assessment.
20

BENEFITS TO THE BANK
The Advisory Services of IFC will continue to
build the Bank’s energy efficiency and renewable
energy loan portfolio in terms of market
assessment and development of strategic plan,
training of the Bank’s staff on specific features of
financing of EE and RE projects, project
identification, evaluation and reporting.
The Bank can continue to avail of the expertise
of IFC staff and consultants in the appraisal and
evaluation of specific market segments,
21

BENEFITS TO THE BANK
technologies and projects involving EE and RE
investments. This will enhance the Bank’s
capacity – building efforts in managing
sustainable energy portfolio.
IFC can also share with the Bank its scoping
studies which can provide business opportunities
and market leads.
22

BDO’S STRATEGY
The Bank will continue to tap the following
sectors for energy efficiency financing: hotels
and resorts, malls, commercial building,
industries, and agro-processing.
For RE projects, the Bank will focus on run-ofriver
mini-hydro projects and selected biomass
projects which use own plant’s agricultural waste
materials as feedstock to produce own power
(captive).
23

BDO’S STRATEGY
We will also tie-up with Energy Service
Companies (ESCOs) to finance their projects or
their clients’ energy projects.
REVIEW OF THE PROGRAM
There were more than 60 projects evaluated
and/or visited for the energy walkthrough audit.
As of July 31, 2012, five projects have been
approved and several others are in the various
stages in the BDO SEF Project pipeline.
24

REVIEW OF THE PROGRAM
A. Summary of Loans Approved and Released
(as of July 31, 2012)
Account Name
Argo International
Forwarders Inc.
Bridgebury/Zuellig
Sunwest Water &
Electric Co. II Inc.
(Suweco II)
Project
EE – Onion cold
storage plant
Loans
Approved
(Term Loans)
P205 M Loan &
P59.59 M
Leasing facility
Loans
Released/Status
P264.59 M
EE – Green
Building
P500 M
P500 M
RE - Mini-hydro P850 M Under loan
documentation
25

REVIEW OF THE PROGRAM
Account Name
Polymacro
Industrial Corp.
Manuela Corp/
Starmall EDSA-
Shaw
Total
Project
RE – Rice-husk
fired power plant
(captive)
EE-Mall/Shopping
Center
Loans
Approved
(Term Loans)
P40 M
P32 M
P1,692 M
Loans
Released/Status
Under loan
documentation
Under loan
documentation
26

REVIEW OF THE PROGRAM
B. Accounts Under Evaluation/Pipeline
(with pre-clearance)
Account Name Project Estimated Loan
Manuela Corp. (Starmall
Alabang Branch)
Price Commercial &
Dev’t Corp. (Liana’s)
Benguet Electric
Cooperative (BENECO)
Total
EE – Airconditioning
& Lighting system
EE- Airconditioning &
Lighting system
EE- System loss
reduction/upgrade of
transmission lines &
substations
P100 M
P30 M
P160 M
P290 M
27

RENEWABLE
ENERGY

RENEWABLE ENERGY
• Energy that comes from natural resources such
as solar, wind, tide & waves, hydro, geothermal
heat, and organic (biological) fuel which are
renewable (naturally replenished)
29

TYPES OF RENEWABLE ENERGY IN THE
PHILIPPINES
Geothermal
Hydro
Wind
Solar
Biomass
30

RE TARGETS SET BY THE PHILIPPINE
GOVERNMENT
• 4.5 GW RE Capacity added from 2003-2013
• 4.7% of Electricity to come from RE by 2013
• Biomass power generating capacity to increase
to 94 MW by 2015 and 267 MW by 2030
31

GEOTHERMAL
• Uses heat energy emitted from within the Earth,
usually in the form of hot water or steam to
produce electricity.
• Existing Capacity: 1,953 MW
• Reserve Estimate: 4,406.56MWe
32

WIND
• Wind turbines are used to gather energy from
the wind.
• Existing Capacity: 33MW
• Potential Capacity: 76,600MW
33

SOLAR
• Uses the sun’s energy to create electricity.
• Existing Capacity: 1MW
• Solar radiation nationwide: annual potential
average of 5.0 KWh/m2/day
35

BIOMASS
• Uses biological material from living, or recently
living organisms, such as wood, waste, and
alcohol fuels to produce power.
• Kinds of fuel used by biomass power plants:
– Agricultural Residues/Wastes
– Energy Crops
– Forestry Residue
– Urban Wood Waste/Mill Residue
– Urban Waste
– Vegetable Oils
– Biogas (e.g. methane)
36

Feedstock
Production
& Logistics
Corn and Grains
Oilseeds & Plants
Agricultural Residues
Energy Crops
Forest Resources
Industrial & Other
Wastes
Biomass
Conversion
• Existing Corn Wet Mills
• Existing Corn Dry Mills
Natural Oil Processing
Agricultural Residue Processing
Energy Crops Processing
(Woody Energy Crops & Perennial
Herbaceous Crops)
Forest Resources Processing
(Includes Existing & Repurposed
Pulp & Paper & Forest Product
Mills)
Waste Processing
Distribution
And End Uses
Biofuels:
• Bulk Distribution
Infrastructure
• Retail Marketing
Network
• Vehicles
Biopower:
• Grid Connectivity
• Co-Firing
Bioproducts:
• Bulk Distribution
Infrastructure
• Chemical
Intermediate
Market
• Consumer Market
37

BIOMASS
• By 2012, local biomass supply potential is
expected to reach 323.1 MMBFOE (equivalent to
26 years), giving the Phil the 3 rd largest biomass
capacity in the world.
• Based on geographical consideration:
– Bagasse in Regions III, IV, VI and VII.
– Coconut in Regions IV, VIII, IX & XI
– Ricehull in Regions II, III, IV and VI.
38

Total: 707MW
39

Total: 1,185MW
40

Total: 476.41MW
41

BDO CLIENTS ENGAGED IN BIOMASS
Account Name
Central Azucarera Don
Pedro, Inc.
BUSCO Sugar Milling Co.,
Inc.
First Farmers Holding
Corporation
Central Azucarera de San
Antonio
Philippine Resins Industries,
Inc.
Central Azucarera dela
Carlota, Inc.
Hawaiian Philippines
Corporation
Capacity
(MW)
Fuel Type
Operation Type
DOE Service
Contract Status
25.52 bagasse Own Use Awarded
24.40 bagasse Own Use Awarded
21.00 bagasse Commercial Awarded
15.00 bagasse Commercial
For Contract
Negotiation
12.00 - Own Use Pre-Evaluation
10.00 bagasse Own Use Awarded
6.50 bagasse Own Use Awarded
Roxol Bionergy Corporation 4.00 bagasse Own Use Awarded
Bogo-Medellin Milling Co.,
Inc.
Eurotiles Industrial
Corporation
Isabela La Suerte Rice Mill
Corporation
2.80 bagasse Own Use Pre-Evaluation
2.00 rice hull Own Use Awarded
- rice hull - -
42

RENEWABLE ENERGY
DEALS IN PIPELINE
as of 2010

RENEWABLE ENERGY DEALS IN PIPELINE
Project Name
Principal
Sponsor/s
Description/
Technology
Location
Estimated
Project
Cost
Energy World
Diamond Generating
Asia
Enfinity Philippines
Renewable
Resources, Inc.
Burgos Wind Farm
Envent
Energy Logics
First Philec Solar
Publicly-listed in
ASX
Mitsubishi Corp./
Ayala Group
Enfinity Group
(Belgium)
EDC
Envent/
Geyser Green
Energy
Delgado/
Berkeley Energy
FPHC
200-300 MW Gas
Fired Power
Plant
100 MW Solar
Farm
2 x 50 MW Solar
Project
86 MW Wind
Farm
50 MW
Geothermal Plant
50 MW Wind
Power Plant
Solar Wafer
Slicing
Equipment
Pagbilao,
Quezon
Various
(Clark,
Mindanao)
Clark,
Pampanga/
Cavite
Ecozone
Burgos,
Ilocos Norte
Biliran
Ilocos Norte
Batangas
$ 300-
400M
$ 250-
300M
$ 250M
$ 200M
$ 120-
150M
$ 125M
$ 50M
44

Project Name
Principal Sponsor/s
Description/
Technology
Location
Estimated
Project
Cost
Natura Mindanao
Nic Alcantara/
Apex Bio-Energy
Biofuel Refining
Plant
Lima,
Batangas
$ 11.2M
Energy Logics
Delgado/
Berkeley Energy
2.3 MW Solar
(first phase)
Manila $ 7.0M
Adtel
Adtel/
Lopez Group
1-2 MW Solar
Power Facility
Various
$ 2.5-5M
Global Green Power
Global Green
17.5 MW Multifuel
Biomass
Power Plant
Panay,
Negros
Php
2.652B
Unisan Biogen
Eco-enerhiya/ Clima
(Suarez Group)/ DCI
11.2 MW Coco
Biomass Power
Plant
Unisan,
Quezon
Php 1.7B
Trans-Asia
Renewable Energy
Corp.
Phinma Group
8MW Wind
Project
San
Lorenzo,
Guimaras
Php 1.0B
Chevron Kalinga
Chevron/
APC Group
100 MW Power
Plant
Kalinga,
Apayao
45

CONCLUDING THOUGHTS
• Everyone recognizes need to save our planet and
maximize its resources.
• We are cognizant of climate change and the need
to reduce our carbon footprint.
• As part of doing our part, we generally are
voluntarily espousing greening efforts in our
companies and green financing for our clients.
46

CONCLUDING THOUGHTS
• While these efforts are considerable, they are not
yet a major portion of our loan books. There are
no incentives to banks or even required credit
exposure from our monetary authorities for
general greening projects.
• With the passing of the Feed In Tariff (FIT) for
renewable energy in the Philippines, we expect to
see more projects launched. There is a healthy
pipeline for these as borrowers have incentives
like tax exemptions plus the tariff protection.
47

CONCLUDING THOUGHTS
• Perhaps this is something the global monetary
authorities can tackle:
• Require each bank to have minimum
exposures for greening (like we currently have
for agriculture and agrarian lending).
• Provide incentives such as capital relief or
lower risk asset weighting. These will allow us
to pass on reduced funding costs to the
borrowers.
48

Eduardo V. Francisco
+63 917 855-6248 evf@bdo.com.ph
evf@bdo.com.ph
Best Investment Bank
in the Philippines:
2006-2012
Best Equity House in
the Philippines:
2006, 2007, 2009, 2010
Best Bond House in
the Philippines:
2007, 2008, 2010, 2012
Best Debt House in
the Philippines:
2006-2010
Best Equity House in
the Philippines:
2006, 2007, 2008, 2010
Best Domestic
Investment Bank in
the Philippines:
2006-2011
Best Equity House in
the Philippines:
2008, 2010
Best Investment Bank
in the Philippines:
2007-2012
Best Bond House in
the Philippines:
2007-2010, 2012
Best Equity House in
the Philippines: 2008
Outstanding Local
Underwriter-2006
BDO Capital & Investment Corporation
Top Corporate Issue
Manager/Arranger - 2011
Top Depository Brokering
Participant - 2011
49