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Green Finance / Treasury & Capital Markets
Philippines’ Alternergy secures first green corporate loan
Proceeds of ADB-backed loan to finance wind farm projects
The Asset 31 May 2024

A publicly-listed Philippine renewable energy developer, Alternergy Holdings Corporation (AHC), has secured its first green corporate loan with support from the Asian Development Bank (ADB).

The loan was secured under AHC’s green finance framework, developed in accordance with the International Capital Market Association’s Green Bond Principles; the Association of Southeast Asian Nations (Asean) Capital Markets Forum’s Green Bond Standards; and the Green Loan Principles of the Asia Pacific Loan Market Association, the Loan Market Association, and the Loan Syndications and Trading Association.

The initial tranche of the loan was secured on May 29, consisting of a 2 billion pesos (US$34.4 million) green corporate loan with BDO Unibank as the sole lender and BDO Capital & Investment Corporation as the mandated lead arranger. The loan will support the development of AHC’s renewable energy projects by Alternergy Tanay Wind Power Corporation (ATWC) and Alabat Wind Power Corporation (AWPC), as well as other forthcoming projects. ATWC and AWPC are both wholly-owned subsidiaries of Alternergy Wind Holdings Corporation, which in turn is wholly owned by AHC.

ADB economic research and development impact department adviser Satoru Yamadera says the transaction demonstrates the bank’s commitment to mobilizing green finance for sustainable development in the Philippines.

“Renewable energy developers like AHC can play a critical role in replacing carbon-intensive energy sources, which would significantly reduce global warming emissions and simultaneously provide employment and education to the host communities of its projects,” Yamadera adds.

ADB provided technical assistance to support project selection, bond framework development and capacity building through the Asian Bond Markets Initiative, which is an initiative of the governments of Asean, People’s Republic of China (PRC), Japan and South Korea to develop local currency bond markets. The PRC Poverty Reduction and Regional Cooperation Fund financially supports this technical assistance programme. This is part of ADB’s overall effort to catalyze sustainable bond issuances across Southeast Asia.

ATWC will secure a green term loan of up to 8 billion pesos for the development of a 112-megawatt wind farm in Tanay, Rizal province. AWPC will also secure a green term loan of up to 5.4 billion pesos for the development of a 64MW wind farm on Alabat Island in Quezon province.

“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,” says AHC chief financial officer Carmen Diaz. “We are grateful to ADB for its valuable advice in designing our green finance framework along global standards. With the establishment of AHC’s green finance framework, we expect the company’s future capital-raising activities to be under the same mechanism as the market for sustainability investments continues to grow.”

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