FLAGGING the risks in the 360-hectare ‘Smart City’ development project by SM Prime Holdings Inc. in Pasay City, the Asian Development Bank (ADB) is proposing a $500-million loan to the listed firm’s subsidiary.
The proposed corporate loan will be extended to SM Smart City Infrastructure and Development Corp. to support the development of roads, bridges, water and power infrastructure, wastewater facilities and stormwater, and flood management systems.
The financing will also cover coastal protection structures, including revetments and wave walls, as well as public open spaces, landscaping, smart city provisions, nature-based solutions, and working capital.
The infrastructure will be built on reclaimed land along Manila Bay, which the ADB noted is an ‘environmentally-sensitive coastal area where reclamation activities are subject to heightened regulatory scrutiny and stakeholder attention.’
The lender classified the project as having ‘substantial’ environmental and social risks, citing potential impacts involving labor and working conditions, pollution prevention, community health and safety, biodiversity, climate change, and stakeholder engagement.
While the project has secured environmental approvals under Philippine requirements, the ADB said the existing environmental assessments do not fully address all requirements of its Environmental and Social Framework.
To address these gaps, the ADB said the borrower agreed to strengthen its environmental and social management system, prepare supplementary environmental and social impact assessments and management plans, update existing plans covering remaining reclamation and coastal protection works, and develop a land acquisition plan.
It also committed to enhancing the firm’s ‘Stakeholder Engagement Plan.’
The project is expected to generate employment during land development, as well as improve access to urban infrastructure and essential services for future workers, residents, entrepreneurs, and the general public.
The ADB has set November 25, 2026, as the target approval date for the proposed financing.