1. Philippines’ Aboitiz issues ADB backed project
bonds
Thomas Blott
29/02/2016
Aboitiz subsidiary AP Renewables has issued Ps10.7 billion ($230 million) in project bonds through a credit enhancement from the Asian Development Bank (ADB)
to refinance the Tiwi‐MakBan geothermal plants in the Philippines.
The deal marks the first non‐recourse bond issuance in the ASEAN region excluding Malaysia since the financing for Indonesia’s Paiton coal‐fired power project in
1997, the first ever bond issuance in Asia‐Pacific to be certified by the Climate Bond Initiative, and the first ever project bond in the Philippines power sector.
The ADB is providing a Ps1.8 billion five‐year loan, and a credit enhancement in the form of a guarantee of 75% of the principal and interest on the bond. Bank of
the Philippine Islands acted as lead arranger and sole underwriter of the bond issuance, which carries a 10‐year tenor. The Credit Guarantee Investment Facility, a
multilateral facility established by the ASEAN+3 governments and the ADB to stimulate ASEAN’s domestic bond market, also participated as a guarantor.
IJGlobal previously reported exclusively in 2014 that the ADB planned to provide credit enhancements to support the issuance of non‐recourse bonds in Asia,
similar in effect to the European Investment Bank’s project bond credit enhancement scheme. IJGlobal also reported exclusively in 2014 that the ADB had identified
the refinancing of the Tiwi‐Makban geothermal facilities as a potential pilot project.
Aboitiz subsidiary AP Renewables acquired the Tiwi‐MakBan project in 2009 for $446.9 million in an auction organised by PSALM, the entity engaged in the
privatisation of existing generation assets in the Philippines.
The project comprises two separate geothermal plants. The Tiwi project has a nameplate capacity of 234MW and is located in the province of Albay, roughly 569km
south of Metro Manila. The MakBan project has a nameplate capacity of 442MW and is located around 70km southeast of Metro Manila on the boundary between
the Laguna and Batangas provinces.
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