AC Energy, Ayala Corporation’s energy platform, announced that two of the world’s largest development institutions, the International Finance Corporation (“IFC”) and the Asian Development Bank (“ADB”) have invested in the AC Energy green bonds. The bonds were issued through AC Energy’s wholly-owned subsidiary, AC Energy Finance International Limited, and guaranteed by AC Energy.
IFC provided an anchor investment of US$75 million to complete the public placement of the company’s five-year green bond, supporting the raising of a total of US$300 million from Philippine and international investors. The additional US$75 million of five-year bonds with a coupon of 4.75% will be listed on the Singapore Stock Exchange (“SGX-ST”). The initial US$225 million issuance was listed on 30 January 2019.
AC Energy also completed a US$110 million private placement of ten-year bonds with a coupon of 5.25%, with ADB as one of the main investors. The ten-year bonds will also be listed on SGX-ST.
IFC’s Director for East Asia and the Pacific Vivek Pathak said: “We are proud to support AC Energy, a key member of our long-term strategic client Ayala Corporation, in greening its power generation portfolio by helping fund its aggressive growth in renewable energy. We are delighted that our partnership, leveraging IFC’s extensive global experience in green bonds, successfully mobilized substantial international investment in the public placement of the company’s 5-year bond.” He added, “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. IFC is a pioneer in green bonds since 2005 and has invested US$22.2 billion in long-term financing of climate-related projects and mobilized another US$15.7 billion from third-party investors.”
“This green bond will contribute to ASEAN’s target of drawing 23% of its energy mix from modern, clean, and sustainable renewable sources by 2025,” said Director General of ADB’s Private Sector Operations Department Mr. Michael Barrow. “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.”
Both the 5-year and 10-year bonds (altogether totaling US$410 million) are the first Climate Bond certified, publicly listed USD 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.
AC Energy’s Green Bond Framework sets out well-defined guidelines for the use of proceeds for renewable energy projects, with comprehensive monitoring and reporting commitments.
“We are delighted to partner with IFC and ADB, as AC Energy further strengthens its Environmental, Social, and Governance standards in managing its energy investments,” said AC Energy President and CEO Eric T. Francia. “AC Energy is fully committed to environmental responsibility, biodiversity protection, and greenhouse gas reduction by scaling up our renewable energy initiatives across Asia-Pacific.”
Proceeds from the recent bond issuances will be used for AC Energy’s renewables expansion around the region including the Philippines, Indonesia and Vietnam. “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,” Francia added.
In 2018, AC Energy generated 2,800 GWh of attributable energy, of which 48% was from renewable sources. AC Energy’s 2025 goal is to reach 5GW of renewable energy capacity, with renewables contributing at least 50% of total energy output.
HSBC acted as Sole Global Coordinator; Bank of America Merrill Lynch (“BofAML”) acted as Sole Green Structuring Agent, and BofAML, CLSA and HSBC acted as Joint Bookrunners and Joint Lead Managers.