PH, EU sign €60M financing agreement

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The Philippines and the European Union (EU) signed a 60 million euro financing agreement for the Green Economy Programme, which will support the country’s transition into a green and circular economy.

Finance secretary Benjamin Diokno and EU counterparts yesterday signed the agreement at the Global Gateway Forum in Brussels.

This programme, a key part of the EU’s contribution to the Team Europe Initiative on Green Economy, aims to assist the Philippines in transitioning towards a sustainable economy.

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This includes embracing the circular economy, reducing waste and plastic usage, ensuring water supply and wastewater treatment, promoting energy efficiency, and deploying renewable energy  to address the impacts of the climate crisis.

To achieve this, the EU will collaborate with the national government, local government units, and the private sector to promote green investments, bonds and skills, focusing on greener supply chains and production processes.

“The Philippine government is grateful for the EU’s generosity and staunch support to the country’s climate change agenda. The financing support from the EU will help the country in fulfilling its Nationally Determined Contribution commitment to reduce and avoid greenhouse gas emissions by 75 percent by 2030,” Diokno said.

“Through this 60 million euro grant, the country will benefit from various measures in reducing the production of wastes and plastics, deploying renewable energy and improving energy efficiency,” he added.

Meanwhile, the Philippines and Luxembourg have recently discussed opportunities to expand cooperation in physical and digital connectivity, renewable energy (RE) and sustainable finance.

DOF said the discussion took place during a courtesy meeting between Diokno and Luxembourg Minister of Finance Yuriko Backes in Luxembourg on October 24.

Diokno highlighted that the Philippine economy has continued to perform well despite the difficult global economic environment, making it an attractive investment hub in the Asean, one of the fastest growing regions in the world.

He further promoted the Philippines’ recently liberalized sectors, including RE, airports, toll roads, shipping and telecommunications, as well as the country’s burgeoning sustainable finance sector.

For her part, Backes emphasized Luxembourg’s strong commitment to investing in RE, sustainability efforts and gender equality.

She likewise expressed the country’s keen interest in exploring cooperation with the Philippines in these areas.

Backes welcomed the Philippine delegation to the Ministry’s main office in Luxembourg on the sidelines of the Global Gateway Forum hosted by European Union Commission President Ursula von der Leyen in Brussels, Belgium, from October 25 to 26.

In a separate statement, the DOF said the European Investment Bank (EIB) has expressed keen interest in partnering with the Philippines to cofinance infrastructure and other sustainable projects.

EIB vice president Kris Peeters said the EIB has already started looking into the Build Better More projects that are aligned with EU’s priority areas, including climate, digital connectivity, sustainable cities and regions and RE.

Diokno affirmed the congruence between the strategic priorities of the Philippines and the EU, highlighting opportunities for the EIB to cofinance some of the 197 infrastructure flagship projects prioritized by the government.

The EIB, which is the lending arm of the EU, is the biggest multilateral financial institution in the world and one of the world’s main financiers of climate action and environmental sustainability.

Meanwhile, the DOF also said Diokno promoted emerging investment opportunities in the Philippines to leaders of Luxembourg-based funds and business groups in a Business Forum and Networking Lunch hosted by the Luxembourg Stock Exchange (LuxSE) on October 24.

“From clean energy to cutting-edge technology, the Philippines is primed and ready to seize emerging opportunities with our partners from around the world,” Diokno said before top representatives from the LuxSE, Luxembourg Ministry of Finance, Luxembourg for Finance, Luxembourg Chamber of Commerce and the Association of the Luxembourg Fund Industry.

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According to the finance secretary, transforming the Philippines into a fast-rising investment hub requires greater foreign participation, which drove the government to enhance retail trade and liberalize key sectors including toll roads, airports, expressways, shipping and telecommunications.

“We have also opened up the renewable energy sector to full foreign ownership. This bold move is seen to open up the floodgates to green investments and green jobs, quickening our transition to a green economy,” Diokno said.

Honorary consul general of the Philippines to Luxembourg and president of the LuxSE Alain Kinsch welcomed the finance secretary’s visit as a prime moment to forge stronger ties between the two countries.

“The Luxembourg financial centre has a lot to offer to both Philippine and Luxembourg market participants. The Philippines has seen strong economic growth in recent years and is open to international cooperation. I am impressed by the level of ambition, innovation and speed with which the Philippine Government is delivering on its infrastructure plan with 197 projects worth $155 billion, of which 39 will be undertaken through public-private partnerships. This is a great opportunity also for international investors to access sectors such as, for example, renewable energy, airports or telecommunication in the Philippines,” Kinsch said.

Despite the limited exposure of the Luxembourg economy to the Philippines, the Republic’s US Dollar- and Euro-denominated Global Bonds are listed in the LuxSE, with the earliest listing dating back to 1992.

“With its sovereign sustainable bond issuances, the Philippines has helped pave the way for sustainable finance in Southeast Asia, and our role is to promote these sustainable investment opportunities to the international investor community,” said Julie Becker, chief executive officer of LuxSE.

 

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