Green Finance
Leadership
A leader in green financing
Through the strategic deployment of green bond proceeds in funding our renewable energy projects and sustainability initiatives, we commit to driving substantial progress towards global climate goals.
To date, we have successfully raised a total of US$ 1.8 billion through landmark green bonds, becoming one of the country’s leading issuers. These fund-raising initiatives boosted our balance sheet and showed sustained investor confidence in ACEN and our growth aspirations.
To support our renewables expansion, we have become a leader in the Green bonds market, raising US$1.8 billion to date since our capital markets debut in 2019. We have not only produced a Green Bond Framework, but also a Green Finance Framework for loans and a Green Equity Framework for our most recent preferred equity issuance. These frameworks provide the foundations for our capital markets initiatives to ensure alignment of the use of proceeds with eligible green projects.
We generally match the currency of our funding with that of the use of proceeds and the de facto currency of our offtake market to minimize foreign exchange risk. Thus, in 2023, we secured loans in Philippines pesos as well as U.S. and Australian dollars to fund our international expansion.
To support our growth plans in a sustainable and responsible manner, we completed our maiden preferred equity issuance bilateral green loans, a major project finance deal and our first-ever sustainability-linked loan. These accomplishments further cement our leadership position in global capital markets in terms of sustainable finance.
Our inaugural ₱25-billion perpetual preferred shares offering on the Philippine Stock Exchange (PSE), a first-of-its-kind in the country, marks a significant step in the financial market and enables us to move further ahead in the country’s renewables space.
Historic fixed-for-life perpetual preferred shares
Driven by a strategy to fortify our balance sheet, diversify our sources of funding and broaden our investor base, we listed our first perpetual preferred share issuance on the Philippine Stock Exchange (PSE) in September 2023. The ₱25 billion landmark issuance was issued in two series, with series A carrying a dividend rate of 7.1330 percent per annum, with a rate resetting on the fifth anniversary. Series B, with an 8 percent dividend and no rate resetting, is the first-ever Philippine Peso-denominated fixed-for-life equity instrument listed on the PSE.
The proceeds will be used for renewable energy projects such as solar and wind farms, in accordance with the Company’s Green Equity Framework. To ensure disbursement to proper uses, we continued to monitor and report the allocation of the proceeds as required by applicable regulations.
BDO Capital, BPI Capital and China Bank Capital were the joint issue managers and, together with PNB Capital, RCBC Capital Corporation, and SB Capital of the Security Bank Group, were the joint lead underwriters and bookrunners for the offer.
International green loans
Much of our green loan initiatives throughout 2023 were aimed toward unlocking Australia’s significant renewables potential. In January, we secured a syndicated green term loan facility with major international banks worth a total of AU$277 million, the platform’s largest green term loan facility to date. In December, we also booked another AU$75 million green term loan with HSBC.
This follows ACEN International’s target of achieving AU$600 million in funding for renewable energy projects in Australia and a follow-through to several transactions completed in 2022, which include a AU$100 million green long-term revolver with DBS Bank Australia, a AU$140 million green long-term facility signed with MUFG Sydney Branch, and a AU$75 million green debt facility signed with the Australian government’s Clean Energy Finance Corporation (CEFC).
We remain a visionary leader in sustainable investments, closing innovative deals aimed at pursuing the world’s collective climate agenda.
Corporate debt
In the Philippines, we booked new corporate debt from some of the country’s largest banks as part of our fundraising plan, including a ₱20 billion loan from Land Bank of the Philippines (LANDBANK) and ₱5 billion from Metropolitan Bank & Trust Company (Metrobank). With local financial institutions now actively increasing their capacity to fund renewable energy projects, and some even introducing Net Zero targets, we are now able to take advantage of these promising developments.
Our first sustainability-linked term loan tied to key performance metrics set with Asian Development Bank (ADB) and Bank of the Philippine Islands (BPI) highlights our integrated approach to sustainability and commitment to renewable energy development.
ADB initiatives
Finally, 2023 turned out to be a banner year for cooperation between ACEN and the Asian Development Bank (ADB), one of our long-standing financing partners. Fresh off the ADB-inspired Energy Transition Mechanism for the SLTEC coal plant in late 2022, the ADB got involved in two landmark finance deals for ACEN.
In January, ADB was the lead arranger for an innovative US$107 million financing package for our 88 MW Ninh Thuan Wind, located in South Central Vietnam. Project financing was arranged and syndicated by ADB as mandated lead arranger and bookrunner, with the lending group also including the Japan International Cooperation Agency, Hong Kong Mortgage Corporation Limited, Sumitomo Mitsui Banking Corporation, ING Bank and Cathay United Bank. In addition, the ADB also granted the wind farm an additional US$5 million grant from the Goldman Sachs and Bloomberg Philanthropies-backed Climate Innovation and Development Fund. The grant will be used for initiatives to safeguard environmental and social risk.
In December, we signed our first sustainability-linked term loan facility, worth ₱11 billion, with ADB and the Bank of the Philippine Islands. Tied to key performance metrics set with the two banks and certified through second-party opinion provider DNV, the loan highlights the company’s integrated approach to sustainability and commitment to renewable energy development. The facility is made up of two loans, ₱5.5 billion from ADB, and another ₱5.5 billion from BPI. The proceeds will fund one of ACEN’s solar projects, enabling the generation of at least 450 GWh annually. Sustainability-linked loans incentivize the achievement of sustainable performance goals, in return for a variable or lower interest rate.
