Gibson, Dunn & Crutcher has represented AP Renewables, a unit of Philippine energy company Aboitiz Power, in the issuance of a landmark climate bond worth P10.7 billion ($225 million) for the Tiwi-MakBan geothermal power facilities. 

Freshfields Bruckhaus Deringer is also involved in the transaction, acting for a lender group that includes Manila-based Asian Development Bank (ADB), ASEAN-focused Credit Guarantee Investment Facility (CGIF) and local finance giant Bank of the Philippines Islands (BPI).

For matters related to Philippine law, SyCip Salazar Hernandez & Gatmaitan is serving as AP Renewables’ legal counsel while the lender group is being advised by Picazo Buyco Tan Fider & Santos. 

Certified by the Climate Bonds Initiative, the project bond is the first of its kind in the Asia-Pacific region and marks the first time that such a bond was issued for a single project in an emerging market. In addition, it is the first local currency project bond in the Philippine power sector and the first credit-enhanced project bond in Southeast Asia (other than Malaysia) since the 1997 Asian financial crisis.

Hong Kong-based partner Patricia Tan Openshaw handled the transaction for Gibson Dunn while partners Don Stokes and Mark Plenderleith headed the Freshfields team. Partners Marievic G. Ramos-Añonuevo and Melyjane G. Bertillo-Ancheta oversaw the project bond for SyCip while partner Estrellita Gacutan led the PicazoLaw team.  

The project bond model could serve as a template for similar future activity in the region, as it allows issuers in developing Asian countries to tap into domestic debt capital markets for projects that would otherwise be ineligible for financing. It also allows more investors to gain exposure to emerging market infrastructure.