Reinforcement bar producer SteelAsia Manufacturing Corp. has secured a ₱1.25 billion green loan facility from Taiwan’s Cathay United Bank Co. to finance its environmentally sustainable steel production initiatives.

In a statement, SteelAsia said the transaction was the first time a Philippine steel company has obtained a green loan from Cathay United, as well as the Taiwanese lender's first overseas green loan extended to a steel manufacturer.

SteelAsia said proceeds from the facility will fund working capital for SteelAsia’s operations, which rely on electric arc furnace technology rather than traditional blast furnaces.

By utilizing scrap recycling and renewable energy, the process yields steel with significantly lower carbon dioxide emissions.

The capital injection comes as SteelAsia prepares to duplicate its low-emission methodology across upcoming facilities. This includes the country’s first medium sections mill in Lemery, Batangas, which is scheduled to begin operations later this year.

The company’s existing Calaca mill in Batangas has produced green steel since 2008 and carries a carbon footprint roughly 90 percent lower than the global average for traditional steelmaking, according to an assessment by DNV of Norway.

The financing is the first facility drawn under SteelAsia’s Sustainable Finance Framework. In February, Moody’s Investors Service rated the framework among the best globally within the steel sector. The guidelines are designed to ensure transparency, corporate governance, and strict adherence to sustainability objectives in the deployment of capital.

“The green loan represents more than a milestone for the company—it is a sign that we are indeed on the right track in our expansion strategy,” SteelAsia President and Co-Chief Operating Officer Rafael Hidalgo said in a statement.

“Steel production with low CO2 emission is not only sustainable for the environment, it is also the foundation upon which we are building the country’s steel industry,” he added.

SteelAsia operates four rebar mills in the country and supplies an estimated 80 percent of the steel used in the nation’s infrastructure, high-rise buildings, and heavy construction projects.

Over the next four years, the company plans to establish new green steel mills in Batangas, Quezon, and Tarlac. SteelAsia estimated these expansion plans could avert 7 million tons of carbon dioxide emissions annually.

For Cathay United Bank, the agreement deepens its footprint in the sustainable finance market of the Philippines. The bank's Manila branch, established in 2015, introduced a sustainability-linked loan to the local market in 2022 and has since expanded its environmental, social, and governance portfolio to include sustainable time deposits alongside standard corporate banking services.

“Cathay United Bank is proud to be part of these initiatives,” said Tony Chao, Senior Vice President and General Manager of Cathay United Bank’s Manila branch. “We are driven to further strengthen our sustainable financing partnership with SteelAsia, as we share a common mission and set of goals.”