International Finance Corp., a member of the World Bank Group, on Monday, issued the first internationally rated triple-A peso-denominated green bonds to support the projects of Energy Development Corp.
IFC said the bonds, equivalent to $90 million with a 15-year maturity, would support the local capital market and renewable energy.
The bonds, called the Mabuhay Bond, set a precedent as the first green bond denominated in pesos and issued by a multilateral development institution.
“Addressing climate change is a priority for IFC. IFC’s Mabuhay bond showcases the powerful role that capital markets could play in mobilizing savings for climate finance,” IFC vice president and treasurer Jingdong Hua said in a statement.
“Adding pesos as a new green bond currency supports our goal to strengthen this important asset class,” Hua said.
IFC said it would use the proceeds of the bond to finance EDC’s capital expenditure program, which is focused on optimizing the generation output of its geothermal power plants and improving resiliency to climate impacts.
EDC is the country’s largest producer of geothermal energy and one of the world’s largest integrated geothermal energy producers.
EDC’s power generation in 2016 represented 9 percent of the Philippines’ total power generation capacity which also included wind and solar power projects.
IFC, a triple-A rated issuer, 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.
“For the Philippines, the deepening of domestic capital market is critical for the long-term sustainability of the economy,” said IFC country manager for the Philippines Yuan Xu.
“The issuance of the Mabuhay bond evidences IFC’s commitment to support the country’s efforts to address climate change,” he said.
IFC is one of the world’s largest financiers of climate-smart projects for developing countries.
IFC’s green bonds support investments in renewable energy, energy efficiency, green buildings and other areas that reduce greenhouse gas emissions.
IFC has invested $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.
IFC has issued 109 green bonds amounting to $7.5 billion in 12 currencies. These issuances are part of a global strategy to develop the green bond asset class in emerging markets.