EDC Raises P10 Billion in ASEAN Green Bonds for Renewable Energy Growth

Energy Development Corp. (EDC) secures SEC approval to issue up to P10 billion in fixed-rate ASEAN green bonds. The proceeds will support EDC's renewable energy portfolio growth and resiliency, contributing to the Philippines' decarbonization and net zero goals.

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EDC Raises P10 Billion in ASEAN Green Bonds for Renewable Energy Growth

EDC Raises P10 Billion in ASEAN Green Bonds for Renewable Energy Growth

The Lopez-led Energy Development Corp. (EDC) has secured regulatory approval from the Securities and Exchange Commission (SEC) to issue up to P10 billion in fixed-rate ASEAN green bonds, marking the second tranche of its P15 billion shelf registration. The proceeds from the bond issuance will support the growth and resiliency of EDC's renewable energy portfolio as the company aims to meet the country's increasing energy needs while pursuing decarbonization and net zero goals.

Why this matters: This development is crucial in the Philippines' transition to a low-carbon economy, as it demonstrates the country's commitment to reducing its reliance on fossil fuels and mitigating the impacts of climate change. The successful issuance ofgreen bonds can also inspire other companies to invest in renewable energy, driving growth and innovation in the sector.

The bond offering, which runs from May 13 to 17, consists of P6 billion in base issue size with an oversubscription option of up to P4 billion. The bonds have been priced at 6.7478%, 6.8873%, and 7.0626% for the three-year, five-year, and seven-year series, respectively. EDC President and COO Jerome H. Cainglet stated, "This second tranche ASEAN green bonds will support the growth and resiliency of our renewable energy portfolio as we serve the growing economy's increasing energy needs while pursuing the country's decarbonization and net zero journey."

The green bonds will partially fund EDC's geothermal and battery expansion projects, as well as various resiliency and maintenance capital expenditure projects. These initiatives are part of the company's P60 billion capital investment program for its drilling operations and renewable energy growth over the next three years. The Philippine Rating Services Corp. (PhilRatings) has assigned the bonds a rating of PRS Aaa with a stable outlook, reflecting EDC's strong financial position and the projects' potential to contribute to the country's renewable energy goals.

EDC, the largest pure renewable energy company in the Philippines, operates 1,464.5 MW of clean and renewable energy capacity, accounting for 18% of the country's total installed renewable energy capacity and 60% of its total installed geothermal capacity in 2022. The company's renewable energy portfolio comprises geothermal, wind, hydro, and solar power sources, with geothermal energy making up the majority of its installed capacity at 1,170 MW.

The successful issuance of the second tranche of ASEAN green bonds demonstrates EDC's commitment to supporting the growth of renewable energy in the Philippines. By investing in geothermal and battery expansion projects, as well as initiatives aimed at enhancing the resiliency and maintenance of its existing facilities, EDC is well-positioned to contribute to the country's decarbonization efforts and the global transition towards a more sustainable future.

Key Takeaways

  • EDC secures SEC approval for P10 billion ASEAN green bonds.
  • Proceeds will support growth and resiliency of EDC's renewable energy portfolio.
  • Bonds priced at 6.7478%, 6.8873%, and 7.0626% for 3, 5, and 7-year series.
  • Funds will partially support geothermal and battery expansion projects.
  • EDC aims to contribute to Philippines' decarbonization and net zero goals.