GuarantCo Ltd (“GuarantCo”) has signed a deal with Sindicatum Renewable Energy Company Pte Ltd (“Sindicatum Renewables”), a Singapore-based developer, owner and operator of renewable energy projects, for US$60 million green bonds (“Green Bonds”), rated A1 by Moody’s (Indian Rupee (“INR”) and Philippine Peso (“PhP”) tranche) and AA- by Fitch (INR tranche).
The Green Bonds are synthetic local currency issues covering INR and PhP but issued and settled in US$. GuarantCo’s guarantees will be denominated in INR and PhP making it a local currency transaction, as are the majority of all GuarantCo’s transactions.
GuarantCo, a Private Infrastructure Development Group (PIDG) company, provided the guarantee in support of a US$ 15 million 5-year INR tranche, a US$ 25 million 7-year INR tranche and a US$ 20 million 10-year PhP tranche, totalling US$ 60 million senior local currency Green Bonds with investors benefiting from a 100% guarantee.
The proceeds from the Green Bonds will be used by Sindicatum Renewables to refinance a mezzanine debt facility from FMO, the Dutch development bank, and Proparco, the French Development Finance Institution, and to fund the construction and acquisition of solar and wind power projects in India and in the Philippines.
Sindicatum Renewables is the first ever offshore private sector corporate entity to issue a 7-year INR Bond and this landmark transaction’s investor base comprises blue-chip names including life insurance companies, a corporate treasury arm of a leading multinational and a sovereign wealth fund.
It is expected that over 140,000 people will benefit from improved service levels through nearly a billion kWh net electricity exports by the greenfield projects in the Philippines. In addition, 2,700 people will benefit from employment during the construction phase of the projects in both India and the Philippines.
Assaad W. Razzouk, CEO of Sindicatum Renewables, said: “We are delighted to have successfully completed this landmark Philippine Peso-denominated Green Bond. Our follow-on transaction was very well received by the market and attracted high-quality long-term investors allowing us to extend the maturity profile of our debt. We can now expand further our renewable energy footprint in the Philippines where we intend to rapidly build a portfolio of 250MW of solar and wind assets.”
Lasitha Perera, CEO of GuarantCo, said: “We are proud to have closed our second deal with Sindicatum Renewables, following the successful US$ 40 million first international corporate Indian Rupee Green Bond in Asia earlier this year. The latest transaction will be the first 10-year local currency Green Bond transaction from South East Asia and most importantly will support green field projects in the Philippines.”
“GuarantCo’s credit guarantee was instrumental in generating interest and ultimately investment commitment and confidence from top life insurance companies in the Philippines. This will have a strong demonstration effect for developers as well as investors in the region.”
“Many people in India and the Philippines will benefit from the projects both through improved service levels and employment during the construction. This will further support our vision to become a centre of excellence for local currency credit solutions in lower income countries thereby assisting with the alleviation of poverty.”