Listed firm Aboitiz Power Corporation will be tapping green bonds as well as the clean energy-leaning loan facilities of the Asian Development Bank (ADB) and International Finance Corporation (IFC) to bankroll its expansion projects – primarily targeted renewable energy (RE) installations.
“We are looking at green bonds. For the funding of AP especially, we’re looking at dollar funding in the near future, so we are trying to make it a green bond. The more important point is: if we do issue green bonds, it’s because we would be raising money for our RE initiatives,” Manuel R. Lozano, chief financial officer of Aboitiz Equity Ventures said.
He further qualified that “definitely, we’re looking at not just green bonds, but we’re also looking at sustainability bonds, which is a similar concept. So depending on which asset we’re looking at, we’re trying to see which one works.”
Emmanuel V. Rubio, president and CEO of Aboitiz Power similarly noted that in terms of accessing green financing for their power projects, “We’re also looking at the framework that ADB and IFC are actually offering.”
He conveyed that the company already has “candidate plants” that they can line up for those green financing options – particularly so since the multilateral lending firms are offering “cheaper debt for renewable energy.”
For the targeted RE capacity replacements if the government will eventually pursue plans to phase out coal-fired electricity generation in the energy mix, the credit facilities being dangled by IFC and ADB are likewise seen highly viable alternatives to capital market access.
Rubio added “the buying out of the coal (plants) and providing cheaper financing to alternatives to replace that capacity... that’s something that we’re looking forward to.”
Lozano emphasized that on the sphere of sustainability bonds offer, their affiliate firm Union Bank had already done an issue early part of this year, “and we’re also looking at that potentially for our other non-RE assets.”
He stressed “we are not doing it for face value, we’ d like to do green bonds because we like using that money to grow our extensive pipeline that Manny (Rubio) and the team have put together.”
“There are many options now to raise money for RE, from the green bonds to the sustainability bonds and possibly this ADB, IFC facilities... so we’re quite bullish that our pipeline, we should have enough debt financing available for these very aggressive plans of Aboitiz Power.”
The Aboitiz power firm had recently unveiled its P190-billion worth of expansion projects that it will roll out over a 10-year period that will beef up the company’s portfolio by additional 4,600 megawatts.
Of the pipelined capacity expansion, the bulk or around 3,700 megawatts will be RE developments across technologies that will include solar, wind and hydro installations.
Once the planned investment growth trajectory is concretized, the aggregate power capacity of Aboitiz Power, which is now the leading generation company in the country, will already top 9,200 megawatts.