The International Finance Corporation (IFC), a member of the World Bank Group, has announced the issue of its first peso-denominated green bonds worth about $90 million.
In a statement, IFC said the green bond, dubbed the Mabuhay Bond, is the first internationally rated triple-A peso-denominated green bond to be issued by a multilateral development institution.
The green bonds have a 15-year maturity and the IFC said it will use the proceeds to finance the capital expenditure program of the Energy Development Corporation (EDC), an integrated geothermal steam and electric power producer in the Philippines.
The IFC describes EDC as the Philippines’ largest producer of geothermal energy and one of the world’s largest integrated geothermal energy producers. EDC’s power generation in 2016 represents approximately 9 per cent of the Philippines’ total power generation capacity, it added.
In January of this year, the IFC said it was extending a loan of $90 million to EDC to help the company recover the service of its geothermal power plants in Leyte that were affected by the July 2017 earthquake.
Some of the proceeds had also been earmarked to support the company’s capital requirement and other corporate purposes for existing geothermal operations this year.
Listed on the Philippine Stock Exchange, EDC produces a total of 1,457.8 MW of clean and renewable energy. Of that, 1,169 MW is generated from geothermal and the remaining is from wind, hydroelectric and solar plants.
IFC Vice President and Treasurer Jingdong Hua said addressing climate change is a priority for IFC and the Mabuhay bond showcases the “powerful role” that capital markets could play in mobilizing savings for climate finance.
“For the Philippines, the deepening of domestic capital market is critical for the long-term sustainability of the economy,” said Yuan Xu, IFC’s Country Manager for the Philippines. “The issuance of the Mabuhay bond evidences IFC’s commitment to support the country’s efforts to address climate change.”
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 who want to put their money in low-risk investments.