The International Finance Corp. (IFC), the private-sector arm of the World Bank Group, has committed $100 million to Union Bank of the Philippines’ first sustainability bond issuance, a landmark transaction aimed at expanding financing for micro, small and medium enterprises (MSMEs) and growing the bank’s sustainable finance portfolio.

In a Wednesday morning disclosure, UnionBank said proceeds from the bond will be used to fund loans for MSMEs and support the expansion of UnionBank’s green and social assets, including renewable energy, energy efficiency and green building projects. The issuance will adhere to the International Capital Market Association’s Sustainability Bond Principles.

“This landmark sustainability bond builds on our strong and continuing partnership with IFC and reflects UBP’s commitment to advancing our sustainable finance agenda,” said Johnson Sia, UnionBank treasurer and head of global markets.

“Following our successful collaboration on UBP’s first social bond, this second partnership with IFC strengthens our ability to support sustainable finance borrowers so they can grow their businesses, create jobs and contribute to inclusive growth in the Philippines,” he added.

The transaction marks the latest collaboration between IFC and UnionBank following IFC’s investment in the bank’s first social bond in 2021, which financed more than 3,000 MSME loans during the pandemic.

IFC has also been providing technical assistance to UnionBank through its 30 by 30 Zero Program, helping the lender diversify its sustainability portfolio and identify new financing opportunities in eligible sectors.

Amena Arif, IFC country manager for the Philippines, said the investment supports efforts to deepen the country’s capital markets while promoting employment and economic growth.

“We are excited to partner once again with UBP on another important milestone in deepening local capital markets in the Philippines,” Arif said.

“Through this sustainability bond, IFC is helping ensure that growth translates into local jobs—creating income, dignity and opportunity in communities across the country. By expanding access to finance for MSMEs, we are enabling businesses to grow, hire locally and build more resilient local economies,” she added.

The project is also supported by the World Bank Group’s Joint Capital Markets Program for the Philippines, which seeks to strengthen local capital markets and mobilize long-term financing for infrastructure, housing and MSMEs, with sustainable finance as a key focus area.