GuarantCo Ltd, a part of Private Infrastructure Development Group (PIDG), has signed a deal with Singapore-based developer Sindicatum Renewables for $60 million worth of green bonds.
The proceeds from the green bonds will be used to fund the construction and acquisition of Sindicatum Renewables’ solar and wind power projects in India and the Philippines. Part of the proceeds will also be utilized to refinance a debt with FMO and Proparco, the French development finance institution.
This green bond will be issued and settled in US Dollars, though the transaction can take place in both the local currencies, namely the Indian Rupee (“₹”) and the Philippine Peso (“PhP”).
GuarantCo has provided the guarantee in support of a $15 million five-year Rupee tranche, a $25 million seven-year Rupee tranche, and a $20 million 10-year Peso tranche, totalling $60 million with investors benefiting from a 100 percent guarantee.
“We are delighted to have successfully completed this landmark Philippine Peso-denominated green bond. We can now expand further our renewable energy footprint in the Philippines where we intend to rapidly build a portfolio of 250MW of solar and wind assets,” said Assaad W. Razzouk, CEO of Sindicatum Renewables.
Lasitha Perera, CEO of GuarantCo, commented on the development saying, “The latest transaction will be the first 10-year local currency green bond transaction from South East Asia and most importantly will support green field projects in the Philippines.”
Recently, there has been an increase in market activity for green bonds. Since their introduction in 2007, green bonds have become mainstream in the financial community. With the annual issuance reaching $155 billion in 2017, green bonds had a 78 percent increase over 2016 according to Climate Bonds Initiative.
Earlier, Mercom reported that Sindicatum Renewable Energy also raised ₹2.5 billion (~$39.3 million) through the sale of rupee-denominated international green bonds.
Recently, the International Financial Corporation (IFC), a member of the World Bank group, issued its first internationally rated triple-A peso-denominated green bond which is equivalent to $90 million. The bond, called Mabuhay Bond, will support the local capital market and renewable energy with a maturity period of 15 years.
In December 2017, the first green bond was launched by a commercial bank, BDO Unibank Inc, in the Philippines. It attracted a $150 million investment from the IFC to help expand financing for private sector investments to address climate change.
Moreover, the Asian Development Bank (ADB) recently raised €600 million (~$702.80 million) in a green bond to support climate change mitigation, as well as a 7-year green bond for adaptation projects.