ADB Backs Philippines' Alternergy with First Green Corporate Loan

ADB's Economic Research and Development Impact Department Advisor, Satoru Yamadera, emphasized the importance of this transaction.


Devdiscourse News Desk | Manila | Updated: 31-05-2024 13:10 IST | Created: 31-05-2024 13:10 IST
ADB Backs Philippines' Alternergy with First Green Corporate Loan
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The Asian Development Bank (ADB) has announced its support for Alternergy Holdings Corporation (AHC), a leading renewable energy developer in the Philippines, as the company secures its first green corporate loan. This milestone was achieved under AHC’s Green Finance Framework, which aligns with international and regional green finance standards.

Loan Details: The initial tranche, secured on 29 May, comprises a 2 billion Philippine pesos ($34.4 million) green corporate loan facilitated by BDO Unibank Inc. as the sole lender, with BDO Capital serving as the mandated lead arranger. This funding will aid the development of AHC’s renewable energy initiatives spearheaded by Alternergy Tanay Wind Power Corporation (ATWC) and Alabat Wind Power Corporation (AWPC), among other future projects. Both ATWC and AWPC are subsidiaries of Alternergy Wind Holdings Corporation, wholly owned by AHC.

Framework and Compliance: The Green Finance Framework developed by AHC adheres to several key standards:

International Capital Market Association’s Green Bond Principles

ASEAN Capital Markets Forum’s Green Bond Standards

Green Loan Principles from the Asia Pacific Loan Market Association, the Loan Market Association, and the Loan Syndications and Trading Association

ADB's Economic Research and Development Impact Department Advisor, Satoru Yamadera, emphasized the importance of this transaction. “This demonstrates our commitment to mobilizing green finance for sustainable development in the Philippines. Renewable energy developers like AHC can significantly reduce global warming emissions by replacing carbon-intensive energy sources, while also providing employment and education to host communities.”

Technical Assistance and Support: ADB’s assistance included project selection, bond framework development, and capacity building, facilitated through the Asian Bond Markets Initiative. This initiative, supported by the governments of ASEAN, the People's Republic of China (PRC), Japan, and the Republic of Korea, aims to develop local currency bond markets. The PRC Poverty Reduction and Regional Cooperation Fund also supported this technical assistance program, reflecting ADB’s broader efforts to stimulate sustainable bond issuances across Southeast Asia.

Future Developments:

ATWC is set to secure a green term loan of up to 8 billion Philippine pesos for developing a 112-megawatt wind farm in Tanay, Rizal Province.

AWPC will secure a green term loan of up to 5.4 billion Philippine pesos for a 64-megawatt wind farm on Alabat Island in Quezon Province.

AHC’s Chief Finance Officer, Carmen Diaz, highlighted the strategic importance of the Green Finance Framework: “As a pure-play renewable company, Alternergy was keen to attract sustainability-minded investors with a well-designed funding framework vetted by a second party. We are grateful to ADB for its valuable advice in designing our Green Finance Framework along global standards.”

Ms. Diaz also noted the growing market for sustainability investments: “With the establishment of Alternergy’s Green Finance Framework, we expect the company’s future capital-raising activities to follow the same mechanism as the market for sustainability investments continues to grow.”

This collaboration marks a significant step in advancing renewable energy projects in the Philippines, contributing to the country’s sustainability goals and enhancing the resilience of its energy sector.

 
 
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