IFC invests S$157 million in sustainability bonds for hospitality sector

MANILA, Philippines — The private sector arm of the World Bank has invested in its first sustainability-linked bond in the hospitality sector issued by Singapore’s CapitaLand Ascott Trust (CLAS) to help decarbonize serviced residences in the Philippines and Indonesia.

In a statement yesterday, CLAS said the International Finance Corp. (IFC) is the sole subscriber for the JPY16.5 billion (about S$157.4 million) sustainability-linked bond being issued as part of the firm’s S$2 billion multi-currency debt issuance program.

The seven-year bond, which will mature in November 2029, has a fixed coupon rate of 1.05 percent per annum and is paid semi-annually in arrears.

Proceeds will be used to refinance CLAS’ existing borrowings.

It will also be used to reduce the carbon output of CLAS’ serviced residences in Southeast Asia such as Ascott Makati and Somerset Millennium Makati in the Philippines, and Ascott Jakarta in Indonesia.

These properties are expected to reduce electricity consumption by 40.5 percent by the end of 2028.

Within that same period, the projects must also obtain IFC’s Excellence in Design for Greater Efficiencies certification, which will help identify cost-effective strategies to reduce water and energy consumption, while lowering greenhouse gas emissions.

Under its 2030 Sustainability Master Plan, CapitaLand is working on accelerating the reduction of its carbon footprint, improving water conservation and resilience, and promoting a circular economy.

“We place sustainability at the core of everything we do. Dovetailing our financing efforts with our environmental, social and governance efforts further affirms our commitment towards responsible growth,” Serena Teo, chief executive officer of CapitaLand Ascott Trust Management Ltd. and CapitaLand Ascott Business Trust Management Pte. Ltd. (the managers of CLAS) said.

CLAS is partnering with stakeholders in the financing and investment community to fight climate change.

To date, CLAS has raised about S$450 million through sustainable financing.

“Currently, 35 percent of CLAS’ portfolio is green-certified and we remain on track to green 50 percent of our portfolio by 2025 and our entire portfolio by 2030,” Teo said.

For her part, IFC regional director for East Asia and the Pacific Kim-See Lim said the development institution’s investment will help CLAS in its efforts to address the climate crisis in the region.

“Our investment will support the decarbonization of a portfolio of energy-intensive buildings, while also ensuring that the energy reduction is specifically aligned with Net Zero targets,” she said.

As of end-June this year, CLAS’ international portfolio covers 95 properties, with more than 17,000 units in 44 cities across 15 countries in Asia Pacific, Europe and the US.