State-owned Development Bank of the Philippines (DBP) has launched a new loan program to expand support for utility-scale solar power developers in the country and bolster investments in the renewable energy sector, a top official said.
DBP President and Chief Executive Officer Emmanuel G. Herbosa said the bank’s Solar Merchant Power Plant (SMPP) Financing Program aims to provide funding support to solar power developers intending to sell electricity through the Wholesale Electricity Spot Market with a longer tenor of up to 12 years with a one year grace period on principal payment.
“DBP is ready to provide financing to viable solar power developers for their capital expenditures such as the construction or expansion of their infrastructure facilities, acquisition of machineries and equipment, among others,” Herbosa said.
DBP is the fifth largest bank in the country in terms of assets and provides credit support to four strategic sectors of the economy – infrastructure and logistics; micro, small and medium enterprises; environment; social services and community development.
Under the SMPP program, qualified borrowers are entitled to a maximum loanable amount of up to 60% of the total project cost for projects located in Luzon, and up to 50% for projects in the Visayas. Reimbursement of eligible solar merchant power projects may also be availed of provided the completed project does not exceed one year from date of project completion.
Herbosa said the new program is expected to contribute to the National Government’s goal of increasing solar photovoltaic capacity in the country from 2.16 Gigawatts (GW) in 2020 to 15.29 GW in 2030.
As a bank for the environment, DBP aims to boost investments in the green energy sector and proactively support the national goal for renewable energy to account for 35% of the country’s power generation mix by 2030, as set in the Philippine Energy Plan (2018-2030), he added.