IFC Partners with Ayala Land on Sustainability-Linked Loan to Decarbonize Real Estate Portfolio

The loan is part of a broader sustainability-linked financing program for ALI, which also includes the issuance of its first sustainability-linked bond (SLB) in the Philippines.

In a significant move to bolster green development in the Philippines, the International Finance Corporation (IFC) has partnered with Ayala Land Inc. (ALI) on its first sustainability-linked financing package. This partnership aims to support ALI in decarbonizing its commercial real estate portfolio.

IFC, a member of the World Bank Group and the largest global development institution focusing 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. This loan is tied to two key sustainability performance targets. The first target 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, significantly increasing from the current 350,000 square meters. 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 percent across ALI's commercial real estate portfolio, which includes malls, offices, and hotels, by the end of 2030.

To meet these targets, ALI plans to implement various energy and water-saving retrofit measures. These measures include energy-efficient lighting and cooling systems, passive building design, low-flow water fixtures, and water harvesting and recycling systems.

The loan is part of a broader sustainability-linked financing program for ALI, which also includes the issuance of its first sustainability-linked bond (SLB) in the Philippines.

"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."

In recent years, IFC has collaborated with ALI 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 become 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 assisted ALI in developing 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."