The International Finance Corporation (IFC) has partnered with Ayala Land Inc. (ALI) on its first sustainability-linked financing package to expand the market for green development in the Philippines. This initiative will support ALI in decarbonising its commercial real estate portfolio.
The 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 a sustainability-linked loan (SLL) for ALI.
This loan is tied to two specific sustainability performance targets. The first target is to certify 1.5 million square meters of ALI’s existing office portfolio with IFC’s EDGE Zero Carbon Certification by the end of 2025, up from approximately 350,000 square meters currently. This portfolio is already the largest EDGE Zero Carbon-certified portfolio in the Philippines. The second target is to reduce greenhouse gas emissions by 42% across ALI’s commercial real estate portfolio, which includes malls, offices, and hotels, by the end of 2030.
To achieve these goals, ALI will implement a range of energy and water-saving retrofit measures, including energy-efficient lighting and cooling systems, passive building design strategies, low-flow water fixtures, and water harvesting and recycling systems.
This loan is part of a broader sustainability-linked financing program for ALI, which also includes the issuance of the country’s first sustainability-linked bond (SLB).
Meean Dy, President and CEO of ALI said, “This landmark investment ensures we keep the momentum towards portfolio decarbonisation, 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.
Jean-Marc Arbogast, Country Manager for the Philippines at IFC said “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.”