WB approves PH’s $750-M climate resilience loan

The World Bank has approved Philippines’ $750-million fresh loan to support the government’s reform program aimed at boosting environmental protection and climate resilience.

The Philippines First Sustainable Development Policy loan would be used to accelerate the country’s economic recovery and boost long-term growth.

According to the World Bank, the new financing supports ongoing government reforms to attract private investment in renewable energy, enhance plastic waste management through reduction, recovery, and recycling, as well as promote green transport.

The World Bank loan also seeks to reduce climate-related fiscal risks from the agriculture sector.
Ndiamé Diop, World Bank Philippines country director, said the country has tremendous potential for renewable energy generation, especially in solar and wind.

“Government actions to encourage investments in this sector, such as promoting foreign direct investments and streamlining the permitting process, could unlock this potential,” Diop said

He noted that renewable energy can help the Philippines mitigate climate change and bring numerous benefits, including enhanced energy security, the creation of green jobs, and improved access to electricity.

“It is a crucial step towards a more sustainable and resilient future for the country,” he added.
The Philippine government has set an ambitious target of 50 percent of renewable energy (RE) in total power generation by 2040 and has started to pursue reforms to implement it, supported by this financing operation.

This increased focus on RE is pursued in parallel with slowing the expansion of coal-fired power generation capacity from 2026 onwards.

Achieving these targets will require a significant increase in investments in solar and wind technologies and a strong policy environment conducive to investment in RE.

“This financing program also supports the introduction of new insurance products suitable for vulnerable smallholder farmers and strengthens the coverage and operations of the Philippine Crop Insurance Commission,” World Bank said.

“The aim is to help mitigate climate-related disaster risks to the country’s budget and the farming sector. If properly designed and targeted, crop insurance can help stabilize farm income, reduce poverty, and provide a climate safety net for food producers,” it added.

The Philippines, along with China, Indonesia, Thailand, and Vietnam, accounts for 55 to 60 percent of the plastic waste that enters the ocean.

Approximately 1.7 million tons of post-consumer plastic waste is generated in the Philippines annually, with an estimated recycling rate of only 28 percent for recyclable plastic waste.

The remaining balance either leaks into the environment or is disposed of as part of the mixed waste stream. — Chino S. Leyco