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Bank watchdog slams BDO’s big funding to gas, betrayal of its no coal policy

BDO: biggest funder of fossil gas in the country, says new report


Withdraw from Coal: End Fossil Fuels (WFC-ECC) on Wednesday urged BDO to halt its fossil gas financing and honor its no coal policy following a report exposing the bank’s continued funding of dirty energy projects.


A day before BDOs’ annual shareholders' meeting (ASM), WFC-ECC released its 2023 Fossil Fuel Divestment Scorecard last April 18 which is the first iteration of the report that included fossil gas financing as a criterion. BDO emerged as the top bank with the most exposure to fossil gas.


“Though BDO only had three transactions, its involvement in these big-ticket deals catapulted its exposure to fossil gas. This comes at a time when LNG expansion plans are in no way aligned with climate ambitions, as reports from Climate Analytics and the latest Intergovernmental Panel on Climate Change show. BDO’s huge stakes in fossil gas undermines climate actions,” said Avril de Torres, Deputy Executive Director Center for Energy, Ecology, and Development, a convenor of WFC-ECC.


BDO was the top underwriter of the SMC Global Power bond that funded Excellent Energy Resources Inc. (EERI) and Mariveles Power Generation Corporation (MPGC). For the SMCGP bond issuance alone amounting to USD 717.1 million (PHP 40 billion) in July 2022, up to USD 439.15 million will be used to finance EERI which BDO funded about 25% of it or USD 107.16 million.


WFC-ECC also slammed the bank’s continued coal financing despite its no coal policy, first announced in December 2021 and later clarified to include no lending to new coal-fired power plant capacity, as well as the interim targets for its exposure as 50% by 2033 and no more than 2% by 2033.


“BDO has been reported in both news and in research by civil society and environmental groups as one of the biggest local funders of coal since 2009, and that it continues to participate in various deals–whether through loans or investments–that enable financing to flow into coal. They’ve also been reported as the top financier of the fossil gas expansion in the country. This means BDO is among the biggest contributors to the worsening climate emergency and the suffering of Filipinos from pollution resulting from coal plant operations and the expensive electricity they produce,” said San Carlos Bishop Gerry Alminaza, Convenor of WFC-EFF, in a prepared statement during the BDO ASM.


According to WFC-ECC’s report, BDO has increased its exposure to the coal industry almost annually since 2020, with four transactions in 2022, after its “no coal” pronouncement in 2021.


“This illustrates the stark disparity between BDO’s public pronouncements versus the reality of their financing activities which is too significant to ignore. I hope BDO lives up to its credo and find a way to divest away from fossil fuels and instead invest more in a renewable energy future. In the occasion of their ASM today, we hope that BDO realizes that every time they commit to finance fossil fuels, they are financing a catastrophic future for all of us – including their shareholders and depositors,” added De Torres.


Bp. Alminaza called on BDO to send a strong policy message by divesting away from fossil fuels and investing in clean, renewable energy for all.


“How can we then be assured of any returns from these types of investments in fossil fuel when these projects are being delayed and are facing mounting opposition from those who are demanding clean and affordable electricity and an urgent and just transition towards renewables?”

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