Asian Development Bank (ADB) Supports $100M Sustainability-Linked Loan for ACEN Corp. and BPI
In a major development for the country’s energy transition goals, the Manila-based Asian Development Bank (ADB) has announced its participation in a $100 million (P5.5 billion) sustainability-linked loan with Ayala-led ACEN Corp. and Bank of the Philippine Islands (BPI).
The ADB will provide a credit guarantee of up to 20 percent of the ACEN loan from BPI. This move is aimed at supporting ACEN’s efforts to divest interests in coal power generation and shift funds into solar and wind power, making it the first power utility company in the Philippines to do so.
Suzanne Gaboury, ADB Director General for Private Sector Operations, lauded ACEN as a “trailblazer in the Philippine market” for its inaugural issuance of a sustainability-linked loan. She emphasized the significance of supporting the energy transition from fossil fuel to clean renewable energy in the region.
The ADB’s partial credit guarantee of the loan allows BPI to leverage ADB’s AAA credit rating, resulting in a larger facility for ACEN and at a lower margin.
The ADB-facilitated loan will enable ACEN’s solar projects to generate a minimum of 450 gigawatt-hours of power per year, which was previously generated through divested coal plants. This is anticipated to result in the avoidance of about 277,650 tons of carbon dioxide annually by 2029.
The ADB highlighted that sustainability-linked loans incentivize the achievement of sustainable performance goals, in return for a variable or lower interest rate. The loan has been certified through second-party opinion provider DNV.
Publicly-listed ACEN, the energy company of the Ayala conglomerate group, operates a diversified portfolio of large-scale renewable power generation projects in the Philippines, Australia, India, Indonesia, and Vietnam, with over 4,500 megawatts of attributable power capacity to date.
