The Asian Development Bank (ADB) has announced that it has invested $20 million in the 1st climate bond issuance of AC Energy, a wholly-owned subsidiary of Ayala Corporation in the Philippines.
ADB is an anchor investor in the 10-year tranche, contributing to a total issue volume of $410 million. Profits of the bonds will finance renewable energy projects in the Asia and Pacific region, including Vietnam, the Philippines, and Indonesia. This climate bond will be used to sustain AC Energy’s plans to set up and expand a regional presence in the development of clean energy projects in accordance with environmental best practices..
“We believe that this green bond issuance offers investors a compelling alternative to traditional investments and will help promote financing of clean energy projects by the private sector across the region. ADB’s support was invaluable to ensure that the bonds comply with CBI standards and we believe that this will demonstrate our commitment to meeting the highest environmental and safeguard standards,” said AC Energy President and Chief Executive Officer Eric Francia.
“This climate bond will help the Association of Southeast Asian Nations meet its target of drawing 23% of the region’s energy mix from modern, clean, and sustainable renewable sources by 2025. AC Energy aspires to be a regional leader in renewable energy, and ADB is delighted to support the Ayala Group in this effort by anchoring this investment and crowding in other institutional investors,” said Director General of ADB’s Private Sector Operations Department Michael Barrow.
AC Energy had over 1.8 GW of power projects (in operation and under construction) at the end of 2018. The climate bond proceeds will add towards AC Energy’s target of 5 GW of renewable energy capacity by 2025 across the region. In 2018, AC Energy generated 2,800 GWh of energy, 48 percent of which was drawn from renewable sources.
This investment is in line with ADB’s fresh Strategy 2030, which mandates that at least 75 percent of the number of ADB’s dedicated operations support climate change mitigation and adaptation by 2030, with climate finance from its own resources reaching $80 billion over 2019–2030.aa
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