Aboitiz Owned AP Renewables Inc. to Issue The First Climate Bonds in Asia

Aboitiz Owned AP Renewables Inc. to Issue The First Climate Bonds in Asia

Aboitz Power has announced that its subsidiary, AP Renewables Inc. (APRI), has signed an omnibus credit facility of P12.5 billion, a BusinessWorld report said. The agreement was signed with the Asian Development Bank (ADB), Bank of the Philippine Islands (BPI) and ADB’s trust fund Credit Guarantee & Investment Facility.

Publicly listed Aboitiz Power is owned by the Aboitiz family. The credit facility includes a P10.7-billion ($225 million) local currency bond and a P1.8-billion ($37.7 million) direct ADB loan. ADB’s credit enhancement comes in the form of a guarantee of 75 percent 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,” Aboitiz Power said. BPI Capital Corp. acted as the lead arranger and bookrunner while BPI Asset Management and Trust Group was appointed trustee and facility agent.

Aboitiz Power 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 long-term capital can help close the region’s infrastructure gap,” he added. Liza Montelibano, Aboitiz Power 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 Aboitiz Power to redeploy capital to our large pipeline of new power investments that include renewable energy,” Montelibano said.

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

Aboitiz Power  was incorporated on February 13, 1998 as a holding company for the Aboitiz Group’s investments in power generation and distribution. However, AP was repositioned in the third quarter of 2003 as a holding company that owned only power generation assets.

The divestment of its power distribution assets was achieved through a property dividend declaration in the form of its ownership interests in the different power distribution companies. The property dividend declaration transferred direct control over the Aboitiz Group’s power distribution business to Aboitiz Equity Ventures, Inc.

In 2005, Aboitiz Power consolidated its investments in mini-hydroelectric plants in a single company by transferring all of Hydro Electric Development Corporation’s and Cleanergy, Inc.’s mini-hydroelectric assets into Hedcor, Inc.

Ownership in Aboitiz Power was opened to the public through an initial public offering of its common shares in July 2007. Since its incorporation, the company has accumulated interests in both renewable and non-renewable generation plants.

Among its subsidiaries include Aboitiz Renewables, Inc., SN Aboitiz Power-Magat Inc., Luzon Hydro Corporation and Therma Power, Inc. It also has interests in distribution utilities and retail electricity suppliers.

ImageSource: http://www.adb.org/sites/default/files/styles/content_media/public/content-media/10886-tiwi-plant.jpg?itok=8rUREbxc

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