ADB confirms first climate bond in Asia
The Asian Development Bank has backed the issuance of the first climate bond in Asia and the $225 million bond will support renewable energy projects.
The ADB will provide credit enhancement to a renewable power company in the Philippines operating a geothermal plant in the capital Manila.
Last year, the ADB promised to double its financing for climate change adaptation and mitigation projects by 2020.
ADB confirmed that the 10.7 billion peso ($225.61 million) bond is for AP Renewables, a subsidiary of AboitizPower Corporation, and will be used to support its Tiwi-Makban geothermal energy facilities.
Todd Freeland, Director General of ADB’s private sector operations department, said: “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.”
Freeland added: “Credit-enhanced project bonds offer an attractive alternative to bank financing; mobilizing cost-effective and long-term capital can help close the region’s infrastructure gap.”
The bond is complimented by a loan from the ADB of 1.8 billion peso ($37.7 million).
The bond has been certified by the Climate Bonds Initiative and is the first in Asia and the Pacific as well as the first ever climate bond for a single project in an emerging market.