CEBU PACIFIC, operated by Cebu Air, Inc., has secured a sustainability-linked loan to help fund its decarbonization efforts and fleet expansion plans.
“Cebu Pacific’s first sustainability-linked aircraft financing is a milestone in our decarbonization journey, as the transaction supports the core element of our program—the modernization of our fleet towards more advanced and fuel-efficient aircraft,” Cebu Pacific Chief Financial Officer Mark Julius V. Cezar said in a media release on Wednesday.
The airline said the terms and amount of the loan remain confidential.
“The financing has been structured to align with Cebu Pacific’s strategic goals and fleet expansion plans,” it noted.
The airline said the sustainability-linked loan is the first of its kind in Southeast Asia for low-cost carriers.
“This landmark deal highlights CEB’s commitment to decarbonizing its operations and reinforces its leadership in sustainable air travel within the region,” it added.
It said the loan was arranged by Crédit Agricole CIB and was structured under a Japanese Operating Lease with Call Option.
Sustainability-linked loans are corporate loans aimed at facilitating environmentally and socially sustainable initiatives.
As part of the sustainability-linked loan agreement, Cebu Pacific has committed to achieving its goal of reducing the carbon emission intensity of its aircraft fleet.
“Meeting these targets will result in financial incentives for the airline under the loan,” Cebu Pacific said.
“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 decarbonization leader in the region,” Mr. Cezar said.
The loan has helped fund the acquisition of a brand-new Airbus A321 new engine option (NEO) aircraft, which it received in December last year.
Airbus’ NEO aircraft is known for its enhanced fuel efficiency, representing the latest generation of Airbus planes designed to be highly compatible with sustainable aviation fuel (SAF).
Cebu Pacific has set a target to fully shift to an all-NEO fleet by 2028.
“The SLL represents a critical step in CEB’s broader efforts to integrate sustainability into its financial and operational strategies. As the airline enters 2025, it aims to maintain its leadership in the domestic aviation sector, set a benchmark for the industry, and champion sustainable air travel,” Cebu Pacific said.
Cebu Air shares closed 0.17% higher at P29.40 apiece on Wednesday. — Ashley Erika O. Jose