SteelAsia secures P1.25 billion loan for green initiatives

MANILA, Philippines — SteelAsia Manufacturing Corp. has secured a loan from Taiwan-based Cathay United Bank amounting to P1.25 billion for the firm’s green steel production and other initiatives.

In a statement yesterday, SteelAsia said it signed an agreement with Cathay United Bank for the green loan facility.

Proceeds will be used as working capital to support SteelAsia’s operations, particularly the use of Electric Arc Furnace technology, which involves producing steel using electricity instead of coal.

Combined with renewable energy and scrap recycling, the process enables the company to produce low carbon dioxide emission green steel.

Since 2008, SteelAsia’s Calaca mill in Batangas has been producing green steel.

The Calaca mill has also been assessed by DNV of Norway as one of the greenest steel facilities in the world, with a carbon footprint of approximately 90 percent lower than the global average for traditional steelmaking.

SteelAsia plans to replicate the low carbon dioxide emission methodology for its upcoming mills, including the country’s first medium sections mill in Lemery, Batangas, which will begin operations this year.

The green loan secured from Cathay United Bank is SteelAsia’s first facility enabled under its Sustainable Finance Framework, rated by Moody’s as among the best globally for steel.

It also makes SteelAsia the first steel company in the Philippines to secure a green loan from Cathay United Bank.

In addition, the loan is the bank’s first overseas green loan with a steelmaker.

“The green loan represents more than a milestone for the company — it is a sign that we are indeed on the right track in our expansion strategy. Steel production with low CO2 emission is not only sustainable for the environment, it is also the foundation upon which we are building the country’s steel industry,” SteelAsia president and co-COO Rafael Hidalgo said.

“Cathay United Bank is proud to be part of these initiatives. We are driven to further strengthen our sustainable financing partnership with SteelAsia, as we share a common mission and set of goals. We look forward to our shared success in this endeavor,” Tony Chao, senior vice president and general manager of Cathay United Bank – Manila branch said.

SteelAsia is one of the largest rebar producers in Southeast Asia. With four rebar mills, it supplies around 80 percent of the country’s steel bar requirements for infrastructure, high-rise and other heavy construction projects.