UnionBank secures $100M for first sustainability bond
Union Bank of the Philippines (UnionBank) has secured a $100-million investment from the International Finance Corp. (IFC) for its first sustainability bond, with proceeds earmarked to expand lending to micro, small and medium-sized enterprises (MSMEs) and finance more environmentally sustainable projects.
These include initiatives related to renewable energy, energy efficiency and green buildings.
On Wednesday, the Aboitiz-led bank said the transaction marks another milestone in its partnership with the private-sector arm of the World Bank Group after IFC invested in its inaugural social bond in 2021.
The issuance also complies with the International Capital Market Association’s Sustainability Bond Principles.
UnionBank said IFC has also been providing technical support through its 30 by 30 Zero Program to help the bank diversify its sustainability portfolio by identifying new eligible sectors and financing opportunities.
“This landmark sustainability bond builds on our strong and continuing partnership with IFC and reflects UnionBank’s commitment to advancing our sustainable finance agenda,” said Johnson Sia, treasurer and global markets head at UnionBank.
Sia added that the latest collaboration would strengthen the bank’s capacity to finance sustainable businesses, enabling them to expand operations, create jobs and contribute to more inclusive economic growth.
For its part, IFC said the investment supports its broader effort to deepen the Philippine capital market while directing more long-term funding toward businesses that generate economic and environmental benefits.
“We are excited to partner once again with UnionBank on another important milestone in deepening local capital markets in the Philippines,” said Amena Arif, IFC country manager for the Philippines.
“Through this sustainability bond, IFC is helping ensure that growth translates into local jobs. By expanding access to finance for MSMEs, we are enabling businesses to grow, hire locally, and build more resilient local economies,” Arif added.
The latest transaction follows IFC’s investment in UnionBank’s first social bond in 2021, which financed more than 3,000 MSME loans as businesses grappled with the effects of the COVID-19 pandemic.
UnionBank said the project is likewise supported by the World Bank Group’s Joint Capital Markets Program for the Philippines. This seeks to develop the local capital market and mobilize long-term financing for infrastructure, housing and MSME lending, with sustainable finance as a cross-cutting priority.
