Financing low-carbon transport transition in the Philippines: Mapping financing sources, gaps and directionality of innovation
Successfully achieving a low-carbon transition in the transport sector requires an understanding of the lending logics of the financial institutions in order to identify the financing directionality and gaps. However, in the transportation literature, there is a lack of attention on the relationship...
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| Format: | Article |
| Language: | English |
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Elsevier
2022-06-01
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| Series: | Transportation Research Interdisciplinary Perspectives |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2590198222000525 |
| _version_ | 1811251535592554496 |
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| author | Varsolo Sunio Jaime Mendejar |
| author_facet | Varsolo Sunio Jaime Mendejar |
| author_sort | Varsolo Sunio |
| collection | DOAJ |
| description | Successfully achieving a low-carbon transition in the transport sector requires an understanding of the lending logics of the financial institutions in order to identify the financing directionality and gaps. However, in the transportation literature, there is a lack of attention on the relationship between financing sources and the direction of innovation. The present study seeks to address this by mapping the flow of finance from financial institutions to transport projects. Our dataset consists of 9 transport projects included in the Philippines’ Nationally Determined Contribution (NDC). We consider different types of projects (rail development, bus rapid transit implementation, jeepney modernization) and various financial actors (multi-lateral banks, private and government banks). Through an analysis of loan portfolio composition and interview data, we uncover the underlying logics of each financial institution in lending to transport projects. Our findings suggest that the lending logics of many financial institutions is primarily driven by portfolio and borrower credit-worthiness considerations, and less by motivations concerning sustainability transition. As a result, with respect to the average, some transport projects are over-financed (e.g. rail development), while others – which have a high potential to accelerate decarbonization – are under-financed (e.g. jeepney modernization). All these have profound implications for the directionality of low-carbon transition. Deeper engagement of transition research with finance is a nascent field, and the current research contributes to the literature not only by presenting a comprehensive mapping of several financing sources and projects, but also of proposing three credit enhancement mechanisms to mobilize capital for under-financed projects. |
| first_indexed | 2024-04-12T16:20:56Z |
| format | Article |
| id | doaj.art-5fab61e93c5e4961bab76e6629c4947c |
| institution | Directory Open Access Journal |
| issn | 2590-1982 |
| language | English |
| last_indexed | 2024-04-12T16:20:56Z |
| publishDate | 2022-06-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Transportation Research Interdisciplinary Perspectives |
| spelling | doaj.art-5fab61e93c5e4961bab76e6629c4947c2022-12-22T03:25:33ZengElsevierTransportation Research Interdisciplinary Perspectives2590-19822022-06-0114100590Financing low-carbon transport transition in the Philippines: Mapping financing sources, gaps and directionality of innovationVarsolo Sunio0Jaime Mendejar1Philippine Council for Industry, Energy, and Emerging Technology Research and Development, Department of Science and Technology, Taguig City, Philippines; Science Engineering and Management Research Institute, University of Asia and the Pacific, Pasig City, Philippines; National Research Council of the Philippines, Department of Science and Technology, Philippines; Corresponding author.John Gokongwei School of Management, Ateneo de Manila University, Quezon City, PhilippinesSuccessfully achieving a low-carbon transition in the transport sector requires an understanding of the lending logics of the financial institutions in order to identify the financing directionality and gaps. However, in the transportation literature, there is a lack of attention on the relationship between financing sources and the direction of innovation. The present study seeks to address this by mapping the flow of finance from financial institutions to transport projects. Our dataset consists of 9 transport projects included in the Philippines’ Nationally Determined Contribution (NDC). We consider different types of projects (rail development, bus rapid transit implementation, jeepney modernization) and various financial actors (multi-lateral banks, private and government banks). Through an analysis of loan portfolio composition and interview data, we uncover the underlying logics of each financial institution in lending to transport projects. Our findings suggest that the lending logics of many financial institutions is primarily driven by portfolio and borrower credit-worthiness considerations, and less by motivations concerning sustainability transition. As a result, with respect to the average, some transport projects are over-financed (e.g. rail development), while others – which have a high potential to accelerate decarbonization – are under-financed (e.g. jeepney modernization). All these have profound implications for the directionality of low-carbon transition. Deeper engagement of transition research with finance is a nascent field, and the current research contributes to the literature not only by presenting a comprehensive mapping of several financing sources and projects, but also of proposing three credit enhancement mechanisms to mobilize capital for under-financed projects.http://www.sciencedirect.com/science/article/pii/S2590198222000525Transport transitionTransport project financingDirectionality of innovationFinancial actorsNationally determined contributionGlobal South |
| spellingShingle | Varsolo Sunio Jaime Mendejar Financing low-carbon transport transition in the Philippines: Mapping financing sources, gaps and directionality of innovation Transportation Research Interdisciplinary Perspectives Transport transition Transport project financing Directionality of innovation Financial actors Nationally determined contribution Global South |
| title | Financing low-carbon transport transition in the Philippines: Mapping financing sources, gaps and directionality of innovation |
| title_full | Financing low-carbon transport transition in the Philippines: Mapping financing sources, gaps and directionality of innovation |
| title_fullStr | Financing low-carbon transport transition in the Philippines: Mapping financing sources, gaps and directionality of innovation |
| title_full_unstemmed | Financing low-carbon transport transition in the Philippines: Mapping financing sources, gaps and directionality of innovation |
| title_short | Financing low-carbon transport transition in the Philippines: Mapping financing sources, gaps and directionality of innovation |
| title_sort | financing low carbon transport transition in the philippines mapping financing sources gaps and directionality of innovation |
| topic | Transport transition Transport project financing Directionality of innovation Financial actors Nationally determined contribution Global South |
| url | http://www.sciencedirect.com/science/article/pii/S2590198222000525 |
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