The Asian Development Bank (ADB) is supporting issuance of the first climate bond in Asia-Pacific by providing credit-enhancement to AboitizPower’s subsidiary AP Renewables in the Philippines.
Last year, ADB committed to doubling its financing for climate change adaptation and mitigation by 2020, including playing a catalytic role to crowd-in private sector climate finance.
The PHP10.7bn ($225m) local currency bond, together with a direct ADB loan of PHP1.8bn ($37.7m), is for AP Renewables’ Tiwi-MakBan geothermal energy facilities.
ADB private sector operations department director-general Todd Freeland said: "The successful use of credit enhancement for Tiwi-MakBan reflects our evolving strategy to make creative use of ADB’s expanding balance sheet to support infrastructure investment in Asia and the Pacific.
"Credit-enhanced project bonds offer an attractive alternative to bank financing, and by mobilising cost-effective, long-term capital can help close the region’s infrastructure gap."
Since acquiring the Tiwi-MakBan complexes in 2009, AboitizPower refurbished facilities to improve performance and extend their operating life.
AboitizPower chief financial officer Liza Montelibano said: "This transaction validates the successful rehabilitation programme of the Tiwi-MakBan facilities.
"The deal opens a new avenue for financing and refinancing our various projects, allowing AboitizPower to redeploy capital toward our large pipeline of new power investments that include renewable energy. We are committed to support the energy needs of the country, and in building renewable energy resources through our brand, Cleanergy."
AboitizPower’s Cleanergy portfolio includes 29 hydro and geothermal power generation facilities with a total attributable net sellable capacity of 915MW.
Image: ADB’s assistance will support clean, renewable energy development in the Philippines. Photo: courtesy of Asian Development Bank.