The Hongkong and Shanghai Banking Corporation’s (HSBC) Philippine branch has released its first sustainable commercial Letter of Credit (LC) to partially fund ACEN’s 160-megawatt (MW) Balaoi and Caunayan wind farm project in Pagudpud, Ilocos Norte – the country’s biggest wind project to date.

HSBC said the trade facilities would provide LC capabilities to the Php11.4-billion project “at a critical moment” towards its completion. Ayala’s power arm is expected to finish the project by the fourth quarter, while commercial operations are slated for the first quarter of next year.

Jean Tricia Ramos, head of HSBC Philippines’ Global Trade and Receivables Finance, said that the funding will help ensure unhampered progress in the project’s completion by providing “timely access to credit” for ACEN to secure the plant’s primary components.

Once completed, the 32-turbine project would contribute to the government’s goal to raise the country’s renewable energy (RE) portfolio to 35% of the country’s energy mix by 2030. It is also particularly seen to generate 504 gigawatt-hours of RE annually and avoid over 304,000 metric tons of CO2 per year. Around 380 jobs for the local community are also expected to be created.

The Balaoi and Caunayan project is ACEN’s third wind venture in the province after the 81MW Caparispisan wind farm, also in Pagudpud, and the 51.3MW Bangui windmills. 

HSBC Philippines Wholesale Banking head Melina Concha said the company has been constantly on the lookout to support sustainability-related ventures as part of the bank’s sustainability agenda.

ACEN Chief Development Officer Jose Maria Zabaleta thanked HSBC for the funding, emphasizing that completing one of the country’s largest wind farms would go a long way in meeting the company’s net-zero commitment and the country’s energy security targets.

The Ayala-led firm, which is looking to build an all-RE portfolio by 2025, currently has 3,800MW of attributable capacity in the Philippines and the Asia-Pacific region. 

Last year, the Bangko Sentral ng Pilipinas called on banks to fund the country’s energy transition following the Asian Development Bank’s commitment to back the Philippines’ quest to eliminate coal from its energy mix.

Other banks such as ACEN’s sister firm Bank of the Philippine Islands, BDO Unibank, Development Bank of the Philippines, and Rizal Commercial Banking Corporation have expressed their willingness to fund RE projects.