APRI climate bond issuance 1st in Asia

http://www.bworldonline.com/content.php?section=Corporate&title=apri-climate-bond-issuance-1supstsup-in-asia&id=123773

AP RENEWABLES INC. (APRI), a unit of Aboitiz Power Corp., (AboitizPower) is issuing the first climate bonds in Asia.



In a disclosure to the stock exchange yesterday, AboitizPower said APRI has signed an omnibus agreement with the Asian Development Bank (ADB), Bank of the Philippine Islands (BPI) and ADB’s trust fund Credit Guarantee & Investment Facility to avail of their combined credit facilities of up to P12.5 billion.

This includes a P10.7-billion ($225-million) local currency bond, along with a P1.8-billion ($37.7-million) direct ADB loan. ADB’s credit enhancement comes in the form of a guarantee of 75% of principal and interest on the bond.

“The issuance was certified as a Climate Bond in December 2015 by the Climate Bond Initiative and is the first issuance of its kind in Asia,” AboitizPower said.

BPI Capital Corp. acted as the lead arranger and bookrunner, while BPI Asset Management and Trust Group was appointed trustee and facility agent.

The company said the proceeds will be used to “finance the partial redemption of APRI’s redeemable preferred shares, and the partial funding of its operating expenditure and future rehabilitation requirements.”

In a separate statement, the ADB said the funds will be used for APRI’s Tiwi-MakBan geothermal energy facilities.

“The successful use of credit enhancement for Tiwi-MakBan reflects our evolving strategy to make creative use of ADB’s expanding balance sheet to support infrastructure investment in Asia and the Pacific,” said Todd Freeland, director general of ADB’s Private Sector Operations Department.

“Credit-enhanced project bonds offer an attractive alternative to bank financing, and by mobilizing cost-effective, long-term capital can help close the region’s infrastructure gap,” he added.

Liza Montelibano, AboitizPower chief financial officer and first vice president, said the transaction validates the successful rehabilitation program of the Tiwi-MakBan project.

The company acquired the Tiwi-MakBan complexes in 2009, and has since invested in the rehabilitation of its facilities.

“The deal opens a new avenue for financing and refinancing of our various projects, allowing AboitizPower to redeploy capital to our large pipeline of new power investments that include renewable energy,” Ms. Montelibano said.

At present, the Tiwi-MakBan geothermal facilities have a combined generating capacity of 390 megawatts of Cleanergy. -- Daphne J. Magturo