fbpx 48423-001: Tiwi and MakBan Geothermal Power Green Bonds Project | Asian Development Bank

Philippines: Tiwi and MakBan Geothermal Power Green Bonds Project

Nonsovereign (Private) Project | 48423-001 Status: Active

ADB will provide a project loan in pesos (or its equivalent in US dollars) and a credit enhancement (in the form of a partial credit guarantee in pesos) to support the issuance of the Philippines' first peso-denominated green project bond. The project involves AP Renewables Inc.'s (APRI) refinancing of capital expenditure (including acquisition and plant rehabilitation) and ongoing operations and maintenance at Tiwi and Makiling- Banahaw (Tiwi-MakBan), the 7th and 4th largest geothermal facilities in the world at two locations on Luzon. The sponsor (Aboitiz Power Corporation, APC) acquired the Tiwi-MakBan complexes from the government in 2009, and invested in plant rehabilitation to improve availability and extend operating life.

Project Details

Project Officer
Ahmed, Salman Private Sector Operations Department Request for information
Country
  • Philippines
Sector
  • Finance
 
Project Name Tiwi and MakBan Geothermal Power Green Bonds Project
Project Number 48423-001
Borrower/Company AP Renewables, Inc.
Country Philippines
Location Province of Albay, Province of Laguna
Type or Modality of Assistance
3266 Loan Ordinary capital resources PHP 1,800.00 million Committed
3266 Guarantee Ordinary capital resources PHP 8,025.00 million Committed
Strategic Agendas Inclusive economic growth
Drivers of Change Partnerships
Private sector development
Sector / Subsector

Energy / Renewable energy generation - geothermal

Finance / Money and capital markets

Gender Equity and Mainstreaming No gender elements
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Portfolio Management Division, PSOD
Responsible ADB Officer Ahmed, Salman
Project Sponsor(s) Aboitiz Power Corporation
Description

ADB will provide a project loan in pesos (or its equivalent in US dollars) and a credit enhancement (in the form of a partial credit guarantee in pesos) to support the issuance of the Philippines' first peso-denominated green project bond. The project involves AP Renewables Inc.'s (APRI) refinancing of capital expenditure (including acquisition and plant rehabilitation) and ongoing operations and maintenance at Tiwi and Makiling- Banahaw (Tiwi-MakBan), the 7th and 4th largest geothermal facilities in the world at two locations on Luzon. The sponsor (Aboitiz Power Corporation, APC) acquired the Tiwi-MakBan complexes from the government in 2009, and invested in plant rehabilitation to improve availability and extend operating life.

The Tiwi complex is located in the province of Albay, about 569 kilometers south of Metro Manila. With a combined nameplate capacity of 234 MW, Tiwi consists of three power plants with two generating units each. The units were commissioned between 1979 and 1982. The MakBan complex is located about 70 kilometers southeast of Metro Manila on the boundary of Laguna and Batangas provinces. With a combined nameplate capacity of 442 MW, MakBan consists of five power plants with a total of 10 generating units. The units were commissioned between 1979 and 1996.

APRI is a wholly owned subsidiary of APC, a leading developer and operator of power generation and distribution assets in the Philippines.

Objectives and Scope
Linkage to Country/Regional Strategy The project is consistent with Strategy 2020 and the Midterm Review of Strategy 2020, which list infrastructure, the environment, and finance sector development as three of ADB''s five core areas. Among the main pillars of ADB''s country partnership strategy for the Philippines are private sector development, reduced environmental degradation, and vulnerability to climate change. The project supports each pillar. The project is also in line with ADB''s programs to increase investment in infrastructure through PPPs, and to increase the availability of long-term finance to fund infrastructure investment. The ADB''s Financial Sector Operational Plan recognizes that the Asia and Pacific region's capital markets require the participation of institutional investors to mobilize long-term savings for infrastructure development, and the project supports the promotion of debt capital markets, including local currency bonds, and ADB''s use of innovative financing mechanisms such as credit enhancements to enable the financing of infrastructure.
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement The project will not entail land acquisition, physical or economic displacement. APRI is operating two power plant facilities owned by the Philippine Government. No additional land additional acquisition is expected for any project rehabilitation activities during the period of ADB's involvement.
Indigenous Peoples There are no indigenous peoples in the vicinity of both power plants. None of the land lots leased to APRI are claimed, used, or owned by any Indigenous Peoples communities.
Stakeholder Communication, Participation, and Consultation The project involves ongoing operations and maintenance in two geothermal power plants which have been operational for over 20 years. Community engagement in the project is done through the Multipartite Monitoring Team and the corporate social responsibility (CSR) units established by APRI at both plants to serve as the main avenue for implementing community development project as well as engaging the community in plant operations.
Timetable for assistance design, processing and implementation
Concept Clearance 27 Jan 2015
Credit Committee Meeting 29 May 2015
Approval 02 Jul 2015
Last PDS Update 21 Mar 2018

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents See also: Independent Evaluation

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Related Publications

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