EDC sets P15-B green bond framework issuance

Published March 4, 2021, 4:50 PM

by Myrna M. Velasco

Lopez-led Energy Development Corporation (EDC) is scheduling P15 billion worth of bond issuance under its maiden “green bond framework”, of which proceeds will be used to bankroll new renewable energy (RE) projects as well as to refinance loans for existing RE facilities.

The company said its board of directors approved bond shelf registration of up to P15 billion – and the initial tranche of the offer will be for P3.0 billion fixed rate bonds, with an oversubscription option of up to P2.0 billion.

 “The bond issuance of EDC is intended for the financing or refinancing of new and existing RE projects that are considered eligible green projects under its green bond framework,” the company has reiterated.

The bond issue, it emphasized, shall be subject to the approval of the Securities and Exchange Commission (SEC); and once green-lighted, EDC is targeting to list it with the Philippine Dealing & Exchange Corporation.

The Lopez-led firm is also eyeing to apply with the SEC “for the certification of the bonds under the ASEAN Green Bonds Standards adopted in the Philippines.”

EDC President and COO Richard B. Tantoco indicated “we’re going full steam ahead to expand our geothermal portfolio with two projects this year.”

On the firm’s celebration of its 45th year on Thursday (March 4), the EDC president asserted that “our 24/7 clean geothermal energy is one of our country’s strengths that will help the transition to a low carbon economy.”

The company explained that its ‘green bond framework’ is drafted “in accordance with the four core components of the International Capital Market Association (ICMA) 2018 Green Bond Principles,” which provides guidelines to the eligible green projects that can be financed through green bonds – and that shall include the procedure for the selection and evaluation of the projects; the management of the proceeds of the green bonds; as well as the subsequent reporting requirements.

It was emphasized that EDC’s green bond framework had gone through the review and second-party opinion of Sustainalytics, a Morningstar Company, which is a leading ratings and analytics firm globally for Environmental, Social and Governance (ESG) research works. Citing the review outcome of Sustainalytics, EDC noted that its green bond framework had been rated as “credible and impactful,” and it similarly affirms the alignment of the framework to “the Green Bond Principles and EDC’s sustainability strategy.”