ADB, ACEN Ink Php5.5 Billion Green Loan For Solar Energy Generation in the Philippines

The Asian Development Bank (ADB) and ACEN Corporation have signed a sustainability-linked loan of up to Php5.5 billion (about US$100 million) to boost solar energy capacity in the Philippines and support the country’s energy transition goals.

A sustainability-linked loan of up to Php5.5 billion from the Bank of the Philippine Islands (BPI), was also signed by ACEN, with ADB providing a partial credit guarantee covering up to 20% of the principal and interest amount. The guarantee allows BPI to leverage ADB’s AAA credit rating, resulting in a larger facility for ACEN and at a lower margin.

“Asia and the Pacific accounts for more than half of the world’s greenhouse gas emissions and supporting its energy transition from fossil fuel into clean renewable energy is key to ADB’s mission as the region’s climate bank,” said ADB Director General for Private Sector Operations Suzanne Gaboury. “ACEN is a trailblazer in the Philippine market as the first power utility company to divest interests in coal power generation and channel funds into solar and wind power. ADB is proud to have facilitated ACEN’s inaugural issuance of a sustainability-linked loan.”

The proceeds will fund ACEN’s solar projects, enabling the generation of at least 450 gigawatt-hours annually, power previously generated through divested coal plants. A total of 277,650 tons of carbon dioxide annually will be avoided by 2029.

Sustainability-linked loans incentivise the achievement of sustainable performance goals, in return for a variable or lower interest rate. The loan has been certified through second-party opinion provider DNV.

ACEN manages a diversified portfolio of large-scale renewable power generation projects in Australia, India, Indonesia, the Philippines, and Vietnam.

ACEN is a subsidiary of Ayala Corporation one of the most diversified conglomerates in the Philippines, with interests in real estate, banking, telecom, water, power, infrastructure, industrial technologies, health care, and education.