CONFIDENTIAL

BPI Sustainable Energy FinanceSwitch Asia Conference

20 November 2014 | Shangri-La, EDSA

I. Philippine Economic & Energy Situation

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First bank in Southeast Asia; established in 1851

First Philippine bank with an investment upgradefrom both Fitch Rating (March 2013) and Moody’sInvestor Service (October 2013)

• Total assets: US$ 28.3B• Market capitalization: US$ 7.1B• Net income: US$ 442.8M

BPI in 2013

• Branches: 825• ATMs: 2,507

• Full service Universal Bank: Corporate and Investment Banking SME Lending Consumer Lending Asset Management and Trust Private Banking

Bank of the Philippine Islands

BPI Sustainable Energy FinanceSwitch Asia Conference

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GDP Growth

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0

1

2

3

4

5

6

7

2012 Actual 2013 Actual 2014 Estimate 2015 Forecast

Indonesia Malaysia Thailand Vietnam Philippines

BPI Sustainable Energy FinanceSwitch Asia Conference

Philippine Energy Situation

• Philippines’ electricity costs one of the highest in Asia and price continues to rise

• Energy deficiency in remote areas, overall Philippine energy supply shortfall, unreliable supply, rotating brown-outs

• Heavy dependence on imported fossil fuels

• ASEAN integration and the need to be more competitive

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Phil $ 0.25

Japan $ 0.24

Sing$ 0.23 Thai

$ 0.15HK

$ 0.13Mal

$ 0.10China$ 0.09

Ind$ 0.05

Electricity Rates in Selected Countries(US $ cents per kilowatt hour, 2013)

Source: Manila Electric Company

BPI Sustainable Energy FinanceSwitch Asia Conference

The new normal

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Business Risk Assessment and Management of Climate Change Impacts by WWF and BPI Foundation

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16 Cities

1. Cebu

2. Davao

3. Baguio

4. Iloilo

5. Cagayan de Oro

6. Zamboanga

7. Laoag

8. Dagupan

9. Angeles

10.Tacloban

11.Naga

12.Bacolod

13.Puerto Princesa

14.Butuan

15.General Santos

16.Santiago

BPI Sustainable Energy FinanceSwitch Asia Conference

Coal, 32.1%

Hydro, 20.3%

Oil based, 19.3%

Natural Gas, 16.5%

Geothermal, 10.8%

Biomass, 0.7%

Solar, 0.6%

Wind, 0.2%

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Note: Generation data includes grid connected, embedded, and off-grid generators

Power Generation Mix 2014

BPI Sustainable Energy FinanceSwitch Asia Conference

II. Sustainable Energy Finance (SEF) Program

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BPI Sustainable Energy Finance (SEF) Team can help you…

Identify opportunities for energy savings

Choose appropriate technologies for your energy efficiency or renewable energy projects

Calculate potential energy cost savings and evaluate project feasibility studies through BPI’s FREE walkthrough audit

Link up with technology vendors, suppliers and consultants

Access financing for working capital, capital expenditure and lease arrangements

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Energy Efficiency

✓ reduce energy use while achieving similar output

• Heating, ventilation and cooling (HVAC)

• Building Management System (BMS)

• Air compression system

• Electrical systems including lighting

• Business expansion involving purchase or upgrade to a more energy efficient equipment

Renewable Energy

✓ generate energy from naturally replenished sources

• Biomass/Biogas

• Geothermal Power

• Solar Power

• Hydro Power

• Ocean Power

• Wind Power

Climate Finance

✓ finance climate-related projects

• Tunnel ventilated piggery/poultry houses

• Manufacturing/Trade of EE/RE products

• Water supply with filtration technology

• Resource efficiency

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Summary of SEF projects financed by BPI

BPI Sustainable Energy FinanceSwitch Asia Conference

Positive Impact of BPI SEF Program1. Lower energy costs; improve earnings of clients/borrowers

2. Clients of SEF Program primarily SMEs

SME sector underserved by banks

Robust SME critical to inclusive growth

3. Improved disaster preparedness of clients

Upgraded and more sturdy/efficient facilities

4. Improved awareness - new technology for operational efficiencies, gap between supply and demand, options for reliable and clean energy

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Walk thru Audit

CebuDavao

Makati

Sustainable Energy Finance Client ForaTechnical Consultation

27 educational forums;

2500 SMEs

BPI Sustainable Energy FinanceSwitch Asia Conference

MSMEs are not credit worthy

Mindset of MSMEs: Not to buy equipment until old one breaks down (cost sensitive)

EE/RE projects are not core business

SEF Program: Challenges and Steps taken

BPI Sustainable Energy FinanceSwitch Asia Conference

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BPI offered franchise loans to franchise owners

Free walkthrough energy audits (financing with technical advice) & exposure to best practices

Exposure to success stories via advertorials/testimonials/fora

Challenge Steps Taken

Philippines MSMEs:- 99.6% of registered Philippine companies - 63% of labor force- 36% of manufacturing output

BPI Sustainable Energy FinanceSwitch Asia Conference

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Lack of education and exposure of MSMEs to new technologies and banking innovations and their impact

Problems with new technologies from inexperienced providers or equipment suppliers

Well-designed, well-funded & sustainable educational campaign (forums, ads and newspaper articles) to orient MSMEs on latest technologies, new approaches as well as banking solutions and their impact to business, the community and the environment

Standardization of criteria for accrediting small and large suppliers

Challenges Steps Taken

SEF Program: Challenges and Steps taken

Quezon City

CebuSEF BotthECCP Sponsorship SEF booth CDO

MakatiClarkSEF Forum Davao

SEF Program: Challenges and Steps taken

BPI Sustainable Energy FinanceSwitch Asia Conference

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Regulatory and financial environment need to be more conducive for MSMEs’ green projects

Recommendation: Incentives for MSME green projects: • EE tax incentives• Fast lane for MSME green project certification• MSME EE & RE project recognition

Solutions:• Accessible bank financing for MSMEs: BPI SEF • Active participation in Dept. of Energy (DOE),

ADB, ACEF, ECCP, PFAN initiatives aimed at improving the regulatory environment

Challenges Recommendations / Solutions

FAST LANE

III. SEF SUCCESS STORIES

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Jeco Development Corporation

First Green Resort located in Palawan Island near the New 7 Wonders of Nature – Puerto Princesa Underground River

Water capture and recycling with waste management and rain harvesting system, efficient chillers

Solar and wind power installation which reduces 20% of its fuel cost Average energy savings: 642 Mwh/year or Php 5M /year Estimated GHG avoidance: 289 tCO2/year

Energy Efficient chillers with non-CFC features

BPI Sustainable Energy FinanceSwitch Asia Conference

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Highly energy efficient cold storage facility (Quezon City and Taguig City) using 2-stage reciprocating compressors fully welded to prevent losses in working pressure that ensure optimum use of electricity while using green refrigerants

Accredited by National Meat Inspection Service under “Triple A” category Average energy savings: 2,280 Mwh/year or Php 13M /year Estimated GHG avoidance: 426 tCO2/year

Glacier Refrigerated Services Corporation

BPI Sustainable Energy FinanceSwitch Asia Conference

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Venvi Agro-Industrial Ventures Inc.

BPI Sustainable Energy FinanceSwitch Asia Conference

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22MW Solar Energy Plant located at San Carlos City, Negros Occidental Annual energy generation: 30,290.07 MWh/year or Php 293 Million/year Estimated GHG avoidance: 13,630.62 tCO2/year

San Carlos Solar Energy Inc.

BPI Sustainable Energy FinanceSwitch Asia Conference

BPI Walks the Talk

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BPI Walks The TalkI. First Initiative: Chiller Replacement

BPI Head Office Case

• Building more than 30 years old

• At the end of year 2010, 3 chillers replaced

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BPI Head Office Building’s Electricity Consumption

Year

Energy Consumption

in kilowatt hours

Annual Gross Savings (Actual)

Annual Gross Savings

(Guaranteed)

2011 – 2012 1,819,156 10,316,211.72 7,200,0002012 – 2013 1,812,437 9,909,046.93 7,200,0002013 – 2014 1,784,085 9,014,677.63 7,200,000

BPI Sustainable Energy FinanceSwitch Asia Conference

BPI Walks The Talk

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II. Second Initiative: Solarization of BPI Branches• 4.9 kWp grid tied system for Ayala Extension Branch

• 5.1kWp grid tied system for BPI Cainta Junction Branch

Target to install solar panels to 31 BPI branches

BPI Sustainable Energy FinanceSwitch Asia Conference

Don’t forego your chance to save on energy costs or produce renewable

energy just because you lack financing.

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BPI is ready to help you

DON’T BE LEFT BEHIND

Thank you!For more information, please contact the Sustainable Energy Finance Team at:

Tel. Nos.: (02) 845-5731 / (02) 845-5935 / (02) 845-5244 / (02) 845-5809

(02) 845-5360 / (02) 845-5373 / (02) 816-9063

Email: bpi_sef@bpi.com.ph

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