Manila, Philippines, July 19, 2024—As part of efforts to grow the market for green development in the Philippines, the International Finance Corporation (IFC) is partnering with Ayala Land Inc. (ALI) on its first sustainability-linked financing package, which will support the company in decarbonizing its commercial real-estate portfolio.
IFC, a member of the World Bank Group and the largest global development institution focused on the private sector in emerging markets, is investing up to Php 14.5 billion ($250 million) in the form of a sustainability-linked loan (SLL) for ALI. The loan is linked to two specific sustainability performance targets: the first is to certify 1.5 million-square meters of ALI's existing office portfolio by the end of 2025 with IFC's EDGE Zero Carbon Certification[1], up from around 350,000 square-meters currently. The portfolio is already the largest EDGE Zero Carbon-certified portfolio in the Philippines. The second target is to reduce greenhouse-gas emissions by 42 percent across ALI's commercial real-estate portfolio by the end of 2030, which includes malls, offices, and hotels.
To achieve these outcomes, ALI will implement a combination of energy and water-saving retrofit measures, including energy-efficient lighting and cooling systems, passive building design measures, low flow water fixtures, and water harvesting and recycling systems.
The loan is part of a larger sustainability-linked financing program for ALI, which also includes the issuance of its first sustainability-linked bond (SLB) in the country.
"Together with IFC, we've already built the largest EDGE Zero Carbon office building portfolio in the Philippines, aligning with the Ayala Group's net zero by 2050 agenda," said Meean Dy, President and CEO of ALI. "This landmark investment ensures we keep the momentum towards portfolio decarbonization, further deepening our shared commitment to a greener property sector in the Philippines."
IFC has been working with ALI in recent years to develop its in-house capacity for sustainable finance and green-building initiatives. In April 2024, Ayala Land Hotels and Resorts Corp (AHRC), ALI's hospitality arm, signed an agreement with IFC to commit to becoming the first hotel group in the Philippines to target EDGE Zero Carbon certification by 2026, following a similar commitment by ALI and AREIT in September 2023. IFC also worked with ALI to develop the sustainability-linked performance targets for the SLL and SLB.
"Ayala Land is a sustainability leader in the property sector in the Philippines, with a steadfast commitment to green their entire portfolio," said Jean-Marc Arbogast, Country Manager for the Philippines at IFC. "We are proud to support the company on this landmark investment, which we hope will also encourage other industry players to join us in the green building movement."
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org
[1] EDGE Zero Carbon is a globally recognized net zero carbon building standard, and the highest level for EDGE. For an existing building to meet this standard, it has to be highly energy efficient (40% savings compared to base case) and carbon neutral (renewable energy, offsets, or a combination) after one year of operations.
