AC Energy green bond issuance attracts $410 M ADB, IFC funds

Energy Inc., the energy platform of the Ayala conglomerate, has received the backing of two of the world’s largest development institutions, raising a total of $410 million from the issuance of green bonds.

International Finance Corp. provided an anchor investment of $75 million to complete the public placement of the company’s five-year green bonds.

This brings the total raised from the issue to $300 million.

The bonds have a coupon of 4.75 percent.

The initial $225-million bonds were issued last Jan. 30 in line with AC Energy’s efforts to green its power generation portfolio.

“This demonstrates the excellent potential of the green bond asset class as a tool for mobilizing international institutional capital into infrastructure assets, and we look forward to expanding our support of such issuances across Asia, advancing the integration of regional power and financial markets,” said Vivek Pathak, IFC director for East Asia and the Pacific.

Meanwhile, AC Energy also completed a $110-million private placement of 10-year bonds with a coupon of 5.25 percent, with ADB investing $20 million.

“This green bond will contribute to ASEAN’s target of drawing 23 percent of its energy mix from modern, clean, and sustainable renewable sources by 2025,” said Michael Barrow, director general of ADB’s private sector operations department.

“AC Energy aspires to be a regional leader in renewable energy in Southeast Asia, and ADB is delighted to support the Ayala Group’s efforts to crowd in other investors,” he said.

To be listed on the Singapore Stock Exchange (SGX-ST), both the five-year and 10-year bonds are the first Climate Bond certified, publicly listed dollar green bond in Southeast Asia.

The certification provides assurance that the proceeds will be used to finance projects and assets that are consistent with delivering a low-carbon and climate resilient economy.

Under the green bond framework, AC Energy will follow well-defined guidelines for the use of proceeds for renewable energy projects, with comprehensive monitoring and reporting commitments.

Proceeds from the recent bond issuances will be used for the expansion of AC Energy’s renewables business in the Philippines, Indonesia and Vietnam.

“AC Energy is fully committed to environmental responsibility, biodiversity protection, and greenhouse gas reduction by scaling up our renewable energy initiatives across Asia-Pacific,” AC Energy president and chief executive officer Eric Francia said.

“AC Energy’s inaugural public placement of green bond opens the door to a wider investor base and enables our renewable energy investments. It also crystallizes our commitment to sustainable growth,” he said.

Last year, AC Energy generated 2,800 gigawatt-hours (gwh) of attributable energy, of which 48 percent was from renewable sources.

AC Energy’s 2025 goal is to reach five gw of renewable energy capacity, with renewables contributing at least 50 percent of total energy output.