Cebu Pacific Acquires Sustainability-Linked Loan for A321NEO Aircraft
Cebu Pacific becomes the first Southeast Asian airline to secure approval for a sustainability-linked loan aimed at modernizing its fleet.
Cebu Pacific Acquires Sustainability-Linked Loan for A321NEO Aircraft
Philippine low-cost carrier Cebu Pacific formally closed a sustainability-linked Japanese Operating Lease with Call Option (JOLCO) for its new Airbus A321NEO, marking its first-ever sustainable aircraft financing.
The LCC is the first airline in Southeast Asia to obtain approval for a sustainability-linked loan (SLL).
According to Cebu Pacific’s Chief Financial Officer Mark Cezar: “Cebu Pacific’s first sustainability-linked aircraft financing is a milestone in our decarbonisation journey, as the transaction supports the core element of our programme – the modernisation of our fleet towards more advanced and fuel-efficient aircraft. With this deal, we want to emphasize that access to financing for sustainability initiatives is available and that Cebu Pacific is taking full advantage of such opportunities in our pursuit of being the decarbonisation leader in the region.”
Translation: Cebu Pacific’s first aircraft financing linked to sustainability marks a significant step in its journey towards reducing carbon emissions, highlighting the availability of financial solutions for green initiatives.
A Great Partner
Crédit Agricole CIB acted as the sole sustainability adviser, JOLCO arranger, and mandated lead arranger for the loan.
The bank’s leading expertise in both aviation and sustainable finance positioned it as Cebu Pacific’s partner of choice for this first-ever SLL.
Bertrand Rovetto, head of Crédit Agricole CIB’s aviation group in the Asia Pacific, noted: “We are delighted to have been selected by Cebu Pacific to structure their first sustainability-linked aircraft financing. Crédit Agricole CIB is a pioneer in sustainable finance; we are committed to supporting our clients in their decarbonization efforts. We hope this is the first of many more sustainability-linked collaborations with Cebu Pacific.”
Translation: Crédit Agricole CIB, recognized for its sustainable financing, looks forward to more collaborations with Cebu Pacific in the future.
How Does It Work?
Under the SLL structure designed by Crédit Agricole CIB, Cebu Pacific has set targets aimed at reducing the carbon emission intensity of its aircraft fleet notably through modernisation towards more advanced and fuel-efficient aircraft. Meeting these targets will provide financial incentives to the airline.
The brand new Airbus A321NEO, delivered to the airline on December 24, features improved fuel efficiency compared to previous generations, contributing significantly to Cebu Pacific’s carbon emission intensity reduction objectives as the airline transitions to an all-NEO fleet by 2028.
