Post COP21 climate finance in action: Philippines project bond for geothermal energy backed by Asian Development Bank: USD 225m in local currency: First Climate Bonds Certified in Asia-Pacific


The Big Picture

“This is a landmark transaction for the Bank of the Philippine Islands (BPI), the Philippines, and the Asia-Pacific region in terms of both capital markets development and climate finance.”

Reginaldo Cariaso, MD of BPI Capital Corporation lead arranger & sole underwriter.


What’s it all about?

The Asian Development Bank (ADB) has backed the issuance of Asia-Pacific's first Climate Bonds Certified bond. ADB is providing both credit enhancement and a direct loan to AP Renewables Inc. (APRI); a Philippines based renewable power company operating geothermal plants south of Manila.

APRI closed its inaugural green bond this week at PHP 10.7bn (USD 225m).

APRI, a subsidiary of the listed AboitizPower Corp., is raising up to PHP 12.5 bn in funding for renewable energy investments with backing from the ADB via PHP 10.7 bn (USD 225m) local currency bond with credit enhancement from ADB and a PHP 1.8 bn (USD 37.7m) direct ADB loan.

Currently, AboitizPower's renewables portfolio is composed of 29 hydro and geothermal power generation facilities with a total of 915 MW attributable net sellable capacity.

The credit enhancement will be risk-participated by the Credit Guarantee Investment Facility (CGIF), a multilateral facility established by ASEAN+3 governments and ADB to develop bond markets in the ASEAN+3 region in 2010.


Why is it important?

  • The bond has been certified by the Climate Bonds Initiative
  • It’s the first certified climate bond in Asia and the Pacific
  • It’s the first ever for a single project in an emerging market
  • And it’s the first credit-enhanced project bond in Southeast Asia (excluding Malaysia) since the 1997-98 Asian financial crisis.


Tell Us More

APRI Inc is the owner-operator of the nameplate capacity of 676MW Tiwi-MakBan plants that were acquired from the government in 2009 and then rehabilitated. The complex is made up of the 234 MW Tiwi facility in Albay and the 442MW MakBan plant straddling the provinces of Laguna and Batangas.

AboitizPower has a number of renewable projects in the pipeline. Feasibility and exploration for hydro and geothermal potential in Luzon and Mindanao are ongoing. AboitizPower also announced its business expansion in Asia, starting off with the hydro and geothermal plant projects in Indonesia.

Tiwi-MakBan is CGIF's first support for project bonds and illustrates the CGIF’s growing role in contributing to local debt capital market development.

The Report to the ADB Board on the proposal is here


Who’s Saying What?


Sean Kidney, CEO Climate Bonds Initiative:

“The Asian Development Bank’s backing is a good example of the key role development banks play. Its credit-enhancement, and the consequent lower cost of capital for the project, is exactly what’s required if the sector is to grow as rapidly as we need it to.”

“ADB’s support for Climate Bonds Certification means investors can be assured of the climate change credentials of this bond.”


Todd Freeland, Director General of ADB’s Private Sector Operations Department:

“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 mobilizing cost-effective, long-term capital can help close the region’s infrastructure gap.”


Reginaldo Cariaso, Managing Director of BPI Capital Corporation, lead arranger and sole underwriter of the bond:

“The transaction is highly innovative, representing the first project bond ever issued in local currency in the power sector in the Philippines and the first credit-enhanced project bond in Southeast Asia (excluding Malaysia) since the 1997-98 Asian financial crisis.”


Liza Montelibano, first vice president and chief financial officer of AboitizPower:

“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.”


The Last Word

“Geothermal energy development will play an important part of the shift to a low-carbon economy. The Philippines and Indonesia in particular have enormous geothermal potential; we expect this bond to be the first of many in the region.”

Sean Kidney CEO Climate Bonds



More Information

ADB Media Release

Climate Bonds Initiative Media Release

AboitizPower Website