IFC and Ayala Land Collaborate on Sustainability-Linked Financing, Pioneering Green Building Initiatives in the Philippines

In a groundbreaking move to bolster the market for green development in the Philippines, the International Finance Corporation (IFC) has partnered with Ayala Land Inc. (ALI) to launch its first sustainability-linked financing package. This initiative is designed to support Ayala Land in its ambitious efforts to decarbonize its commercial real estate portfolio.

IFC, a member of the World Bank Group and the largest global development institution dedicated to the private sector in emerging markets, has committed to investing up to Php 14.5 billion (approximately $250 million) in a sustainability-linked loan (SLL) for Ayala Land. The financing package is tied to two specific sustainability performance targets. The first target aims to certify 1.5 million square meters of Ayala Land’s existing office space by the end of 2025 with IFC’s EDGE Zero Carbon Certification, significantly increasing from the current 350,000 square meters. This would further cement Ayala Land’s status as the largest EDGE Zero Carbon-certified portfolio in the Philippines. The second target involves a reduction in greenhouse gas emissions by 42% across Ayala Land’s commercial real estate portfolio, which includes malls, offices, and hotels, by the end of 2030.

To achieve these ambitious goals, Ayala Land plans to implement a series of energy and water-saving retrofits, such as energy-efficient lighting and cooling systems, passive building design measures, low-flow water fixtures, and water harvesting and recycling systems.

This loan forms part of a broader sustainability-linked financing program for Ayala Land, which also includes the issuance of its first sustainability-linked bond (SLB) in the Philippines.

“Together with IFC, we’ve already established the largest EDGE Zero Carbon office building portfolio in the Philippines, aligning with the Ayala Group’s net-zero agenda by 2050,” said Meean Dy, President and CEO of Ayala Land Inc. “This landmark investment ensures we maintain momentum toward portfolio decarbonization, further deepening our shared commitment to a greener property sector in the Philippines.”

IFC has actively collaborated with Ayala Land over recent years to enhance its capacity for sustainable finance and green-building initiatives. In April 2024, Ayala Land Hotels and Resorts Corp (AHRC), ALI’s hospitality division, signed an agreement with IFC to become the first hotel group in the Philippines to target EDGE Zero Carbon certification by 2026. This commitment followed a similar pledge by ALI and AREIT in September 2023. Additionally, IFC has worked closely with Ayala Land to develop sustainability-linked performance targets for both the SLL and SLB.

“Ayala Land is a sustainability leader in the Philippine property sector, consistently demonstrating a steadfast commitment to greening their entire portfolio,” remarked 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 inspire other industry players to join us in the green building movement.”