The World Bank through International Finance Corp. (IFC) has issued a pioneering peso-denominated bond worth $90 million to bankroll Energy Development Corp.’s capital expenditure program
The IFC in a statement described the paper dubbed “Mabuhay Bond” as the first internationally rated triple-A, peso-denominated green bond to be issued by a multilateral development institution.
The group said the 15-year bond was meant to support the Philippines’ capital market as well as renewable energy.
EDC’s main push is to optimize the operation as well as shore up the disaster resiliency of its geothermal power plants, especially those in Leyte which was hit last year by a strong earthquake as well as a devastating typhoon.
Before these calamities, EDC’s electricity generation in 2016 accounted for about 9 percent of the Philippines’ total power generation capacity.
“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.
Yuan Xu, IFC country manager for the Philippines, said the issuance of the Mabuhay bond showed the group’s commitment to support the country’s efforts to address climate change.
“For the Philippines, the deepening of domestic capital market is critical for the long-term sustainability of the economy,” Xu said.
IFC has so far issued 109 green bonds that rack up a total volume of $7.5 billion in 12 currencies.
These bonds are part of a global strategy to develop the green bond asset class in emerging markets.
The green bonds support investments in renewable energy, energy efficiency, green buildings, and other areas that reduce greenhouse gas emissions.