Freshfields Bruckhaus Deringer has advised the Asian Development Bank (ADB), Credit Guarantee & Investment Facility (CGIF) and the Bank of the Philippine Islands (BPI) on the issuance of US$225m bonds by AP Renewables, Inc., a subsidiary of AboitizPower Corporation, for the Tiwi-MakBan geothermal power facilities.

Freshfields advised ADB in its capacity as guarantor and lender, CGIF as the second-loss cover provider and BPI as arranger, intercreditor agent and initial noteholder.

The project bond, which has been certified by the Climate Bonds Initiative, is the first of its kind in the Asia-Pacific region and the first ever ‘climate bond’ issued for a single project in an emerging market.

In addition to these landmark aspects of the bond, it is also the first local currency project bond in the Philippine power sector and the first credit-enhanced project bond in that jurisdiction.

The project bond model represents a new means for ‘developing Asia’ issuers to access domestic debt capital markets for projects that would not otherwise qualify for financing and for a broader range of investors to gain exposure to emerging market infrastructure.

This is a significant transaction which is anticipated to be a template for further infrastructure project bond activity in the region.

The Freshfields team advising on the transaction was led by partner Don Stokes, with partner Mark Plenderleith for CGIF.