IFC raises $90M via first peso green bond issue

THE INTERNATIONAL Finance Corporation (IFC) has issued $90 million worth of peso-denominated green bonds called the “Mabuhay Bond,” marking its first foray into the peso debt market.
In a statement on Monday, the World Bank’s private sector development arm said that it issued the green bonds maturing in 15 years “to support the local capital market and renewable energy.”
“IFC will use the proceeds of the bond to finance the Energy Development Corporation’s (EDC) capital expenditure program, which is focused on optimizing the generation output of its geothermal power plants and improving resiliency to climate impacts,” the statement read.
IFC’s announcement follows its March 22 loan financing deal with EDC, which includes the return of service of its geothermal power plants in Leyte affected by the July 2017 earthquake.
EDC and its subsidiaries own and operate a diversified portfolio of renewable energy projects in the Philippines with a total installed capacity of 1,472 megawatts, including geothermal, hydro, wind, and solar projects as of end-2017.
It also generates 9% of the Philippines’ total power generation capacity as of 2016.
“Addressing climate change is a priority for IFC,” said IFC Vice-President and Treasurer Jingdong Hua.
“IFC’s Mabuhay bond showcases the powerful role that capital markets could play in mobilizing savings for climate finance. Adding pesos as a new green bond currency supports our goal to strengthen this important asset class,” he said.
IFC Country Manager for the Philippines Yuan Xu meanwhile said “the deepening of domestic capital market is critical for the long-term sustainability of the economy.”
“The issuance of the Mabuhay bond evidences IFC’s commitment to support the country’s efforts to address climate change,” added Ms. Xu.
According to the IFC, it has invested a total of $18.3 billion in long-term financing from its own account and mobilized another $11 billion through partnerships with investors for climate-related projects since 2005.
It has also issued a total of 109 green bonds worth $7.5 billion in 12 currencies.
“These issuances are part of a global strategy to develop the green bond asset class in emerging markets,” IFC said.
IFC is a triple-A rated issuer and has issued local currency bonds in over 30 countries to help build capital markets by attracting investors. — E.J.C. Tubayan