Public and Private Climate Finance Required to Combat Climate Change | Asian Development Bank

Public and Private Climate Finance Required to Combat Climate Change

Video | 1 July 2015

In the Philippines, the private sector is joining with the government and ADB to co-fund a wind farm in the northern part of the country, showing how pooled resources can effectively finance climate-smart energy projects.

Transcript

Title: Public and Private Climate Finance Required to Combat Climate Change

Description: In the Philippines, the private sector is joining with the government and ADB to co-fund a wind farm in the northern part of the country, showing how pooled resources can effectively finance climate-smart energy projects.

VO: Pursuing low carbon economic growth is a goal for most countries in Asia Pacific and beyond. For this to happen, private sector investment – so called climate finance – is required. Public money alone is just not enough. Realizing the importance of financing climate friendly-projects, governments and the private sector from home and abroad are now coming together.

In the northern Philippines, this 220 million US dollar 81 megawatt wind farm in the breezy province of Ilocos Norte contributes power to the national grid. The Philippine Investment Alliance for Infrastructure or PINAI fund invested up to 75 million US dollars in the windfarm.

The fund itself has several investors - the Philippine state owned pension fund Government Service Insurance System or GSIS, Macquarie Infrastructure and Real Assets or MIRA, part of global financial services form Macquarie Group, Dutch pension fund asset manager APG and the Asian Development Bank.

PINAI, which is managed by MIRA, was launched in July 2012 to capitalize on the various public-private partnership infrastructure opportunities in the Philippines.

SOT: Robert Vergara
President
Government Service Insurance System
Infrastructure is one asset class that has the characteristics that meet cash flow characteristics, which complement the requirements of our actual liabilities. When this opportunity came to invest in Pagudpud our manager looked at it and saw that the returns were good. It’s good for the environment, it’s good for the local community, and again, it’s good for the GSIS stakeholder because it generates the return that we need to meet our actual liabilities in the future.

SOT: Michael Rodriguez
Macquarie Group
MD, Macquarie Infrastructure Advisory (Philippines) and CEO, Philippine Investment Alliance for Infrastructure
We identified the Philippines as a rapidly growing market for infrastructure investment and in order to make a bigger impact and to come up with a better contribution to the economy, it was felt that the pooling of resources would be more effective.

VO: Aside from PINAI, other investors have also pumped money into the wind farm – Philippine companies UPC Philippines Wind Holdco and Ayala Corporation Energy Group.

SOT: John Eric Francia
President and CEO
Ayala Corporation Energy Group
We believe as Ayala, as new players in the energy or power sector in the Philippines, we wanted to make sure we contribute in a meaningful way so we’re both in renewable energy as well as conventional forms of energy.

SOT: Michael Rodriguez
Macquarie Group
MD, Macquarie Infrastructure Advisory (Philippines) and CEO, Philippine Investment Alliance for Infrastructure
The climate issue globally is of course very big. To address it, the private sector is expected to play a huge part.

VO: Challenges in climate financing remain, given the vast sums involved but as different investors pool finances for climate change projects , they can together make a huge difference  in keeping climate change at bay, while still fuelling economies.