MUFG Bank has closed its first sustainable trade asset finance transactions in the Philippines by funding key renewable energy projects of units of San Miguel Corp. and SN Aboitiz Power Group (SNAP).
The transactions, announced on Monday, were said to mark MUFG’s initial implementation of its sustainable trade asset finance framework in the Philippines. The bank officially launched its sustainable trade solutions in the country last November.
Marie Diana Lynn Singson, MUFG Manila Branch deputy country head and head of global corporate banking, said the transactions demonstrated how trade finance could be used to advance climate goals while supporting large-scale infrastructure projects.
“These transactions have further demonstrated their strong drive for positive climate action, while also reaffirming MUFG’s efforts in partnering clients to pursue their sustainability agendas,” she said.
“We look forward to continuous close collaboration with them on their journey towards a sustainable future.”
The financing structures were designed to support renewable energy commitments made by San Miguel Global Power (SMGP) and SN Aboitiz Power Magat Inc. as part of the Green Energy Auction Program.
SMGP is the power arm of conglomerate San Miguel, while SN Aboitiz Power Magat is a subsidiary of SNAP, a joint venture between Norway’s Scatec ASA and Aboitiz Power Corp.
The GEAP, meanwhile, is a government initiative aimed at increasing the share of renewables in the country’s energy mix, reducing dependence on fossil fuels, and supporting the Philippines’ international climate commitments.
Under the transactions, MUFG issued standby letters of credit (SBLCs) to back performance obligations required by the Department of Energy for projects awarded under the auction. These served as financial guarantees to ensure that renewable energy projects proceed as committed.
For SMGP, MUFG issued an SBLC in favor of the Department of Energy to support the delivery of 1 gigawatt in renewable energy capacity from floating solar and hydropower commitments.
MUFG also issued an SBLC to guarantee the performance obligations of SN Aboitiz Power’s 50-megawatt floating solar project.
Belinda Han, head of transaction banking for Asia Pacific at MUFG, said the deals “highlight MUFG’s ability to structure innovative trade finance solutions that embed sustainability principles while providing essential credit support for renewable energy projects.”
San Miguel shares were unchanged at P85.00 each, while those of AboitizPower were down 20 centavos, or 0.45 percent, closing at P44.15 apiece on Monday.