IFC, a member of the World Bank Group, committed an investment of $75 million in the first-ever listed green bond issued by AC Energy Finance International Limited and guaranteed by AC Energy, the power arm of Ayala Corporation.
IFC’s investment anchored a $300 million green bond, attracting interest from international and Philippine institutional and bank investors and opening up more financing for renewable energy projects in the Asia Pacific region.
This is the first Climate Bond certified infrastructure-focused green bond to be publicly listed in Southeast Asia. The five-year green bond is listed on the Singapore Exchange.
The proceeds from the AC Energy green bonds will be used to finance the company’s plans for up to 5GW of renewable energy projects in East Asia and Pacific to 2025, with IFC’s subscription dedicated to selected solar PV and wind projects in Vietnam. This builds on IFC’s investment in the power sector in Vietnam, particularly its equity stake in Gia Lai Electricity Joint Stock Company, the developer of the first operational utility-scale solar PV projects in the country.
The investment will also support AC Energy’s strategy to transform the company into a regional player focused on renewable energy, beyond its home market in the Philippines.
“We are delighted to partner with a global player like IFC as we take a major step to grow our renewable energy investments. IFC’s anchor investment and extensive experience in green bonds were key in successfully mobilizing substantial international and Philippine investment in AC Energy’s maiden capital market offering,” said Eric T. Francia, AC Energy President and CEO.
AC Energy’s parent company, Ayala Corporation, is a strategic client of IFC in Asia and a regional and global leader in the corporate pursuit of the UN Sustainable Development Goals as a founding member of the UN Global Compact Network in the Philippines.
Vivek Pathak, IFC Director for East Asia and the Pacific, said: “This partnership, leveraging IFC’s extensive global experience in green bonds, demonstrates the tremendous potential of the green bond asset class as a tool for mobilizing international institutional capital into infrastructure assets.” He added, “We look forward to expanding our support of such issuances across Asia, advancing the integration of regional power and financial markets.”
The investment is in line with IFC’s commitment to grow green capital markets, including infrastructure-targeted green bonds, essential for funding the region’s massive infrastructure needs. IFC has helped catalyze the green bond market since 2010 and to date has issued 133 green bonds for $8.8 billion in 16 currencies including the Philippine Peso Mabuhay green bond and Indonesian Rupiah Komodo green bond. IFC also helps financial intermediaries issue their own green bonds, as an anchor investor, such as in the Philippines’ BDO Unibank and China Bank, Thailand’s TMB Bank and Indonesia’s Bank OCBC NISP.