MUFG Bank Ltd., Japan’s largest commercial lender, is prepared to finance nuclear energy projects in the Philippines as part of its regional sustainable finance strategy, though it favors smaller reactors over reviving the country's dormant, large-scale assets.

In a media roundtable, MUFG Managing Director and Head of Sustainable Finance for Asia Pacific Colin Chen said that any potential funding remains contingent on explicit backing from Tokyo.

Chen explained that while the bank is open to providing financial support for the nuclear sector, such allocations will only occur under specific parameters tied to Japanese state interests.

Japan remains highly sensitive to nuclear developments due to its history as the only country to experience atomic bombings, Chen said, even though it operates the highest number of nuclear power stations outside of China.

He added, “As a bank, we will support the Japanese government's initiative to build nuclear plants. So as long as the Japanese government is pushing the initiative… we will do it.”

The same goes for the Philippines, in case the government again decides to allow the construction of nuclear power plants, Chen said “if it’s supported by the Japanese government, i.e. it will be a Japanese contractor, or through some Japanese agency like JICA (Japan International Cooperation Agency) or through the JBIC (Japan Bank for International Cooperation) process and all that, then we would support.

He stressed that, “it has to be supported by…We have to support a Japanese government endeavor.”

But for the moment, MUFG is only supporting nuclear power plants in Japan, “It's just supporting the Japanese. There are a lot of Japanese companies wanting to build nuclear power plants.”

“The next question is, are we going to build these three-gigawatt nuclear power plants? The new thing that we are looking at is the small nuclear reactors. Those will be a lot more attractive and, presumably, safer to put into place,” said Chen.

MUFG has supported the sustainability and energy-transition ambitions of leading Philippine corporates through publicly disclosed green loans, sustainability-linked financing, and renewable energy-related funding transactions across Asia-Pacific.

Among these is the ₱273.5 billion financing for Prime Infrastructure Capital’s pumped storage hydro power project where MUFG was the green loan coordinator, equity standy letter of credit issuer, and ESG coordinator. Among the local banks that participated is MUFG’s local partner Security Bank Corporation.

MUFG also issued a standby letter of credit (SBLC) in favor of the Department of Energy to secure San Miguel Global Power’s performance obligations for renewable energy developments, including floating solar and hydropower projects.

At the same time, MUFG also provided and SBLC supporting SN Aboitiz Power’s obligations related to a 50-MW floating solar project. The facility was reported as SN Aboitiz Power’s first green trade finance arrangement.