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First Asian Climate Bond Issued by Philippines Geothermal Company
Asian Development Bank Backs Climate Certified Clean Energy Project Bond
LONDON: 1/03/2016: 1600GMT: Philippines geothermal company AP Renewables Inc. (APRI) yesterday reached financial close for a PHP 10.7b (US$ 225M) certified Climate Bond for the Philippines based Tiwi-MakBan geothermal project. The bond, which has been certified by the Climate Bonds Initiative, was the first in Asia and the Pacific to receive Climate Bonds certification and the first ever Climate Bond for a single project in an emerging market.
In a News Release issued from Manila, ADB stated they will provide credit enhancement in the form of a guarantee of 75% of principal and interest on the bond and also a direct loan of PHP 1.8b (US$37.7M).
Sean Kidney, CEO Climate Bonds Initiative:
“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.”
“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 promotes clear standards for assets that are important to addressing climate change. 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:
“This is a landmark transaction for the Bank of the Philippine IsIands (BPI), the Philippines, and the Asia-Pacific region in terms of both capital markets development and climate finance. 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.”
For more information, please contact: Andrew Whiley, Communications Manager, [+44 (0) 7506 270 943]
Notes for Journalists:
About Climate Bonds Initiative: The Climate Bonds Initiative is an investor-focused not-for-profit, promoting large-scale investment in the low-carbon economy.
About Climate Bonds Standard V2.0: Climate Bonds Standard V2.0 is an overarching multi-sector standard that allows investors and intermediaries to easily assess the environmental integrity of bonds labelled as green and or funding low carbon development. There are pre-issuance and post-issuance requirements and a streamlined certification process to match the tempo of the mainstream debt capital markets. More information here.
About Asian Development Bank: Based in Manila, ADB is is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentaly sustainable growth and regional integration. More ADB information here.
ADB Media Release: “ADB Backs First Climate Bond in Asia” is here.
Disclaimer: The information contained in this media release does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative is not advising on the merits or otherwise of any bond or investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation.