Philippine low-cost carrier Cebu Pacific has officially closed a sustainably-linked Japanese operating lease with call option (JOLCO) for its new Airbus A321NEO, marking the first-ever sustainable aircraft financing.
LCC is the first airline in Southeast Asia to be approved for a Sustainable-Linked Loan (SLL).
According to Mark Cesar, Chief Financial Officer of Cebu Pacific: “The financing of Cebu Pacific's first sustainability-connected aircraft is a milestone in our decarbonization journey, as the transaction supports a key element of our program – the modernization of our fleet towards greater efficiency and fuel-efficiency. With this Biman agreement, we want to emphasize that there is access to financing for sustainable initiatives and that Cebu Pacific is taking full advantage of such opportunities in our pursuit to become the decarbonization leader in the region.”
A great partner
Crédit Agricole CIB acted as sole sustainability advisor, JOLCO arranger and mandatory lead arranger for the loan.
The bank's leading expertise in both aviation and sustainable finance positions it favorably to be the partner of choice for Cebu Pacific's first SLL.
Bertrand Roveto, head of Crédit Agricole CIB's aviation group in Asia Pacific, commented: “We are delighted that Cebu Pacific has been selected to form their first sustainability-connected aircraft financing. Crédit Agricole CIB is a pioneer in sustainable financing and as we are committed to supporting our clients in their decarbonisation efforts, we have developed a financial incentive system that rewards airline progress towards their net zero ambitions. We hope this is the first of many more sustainability-connected focused collaborations with Cebu Pacific.”
Most notably, Crédit Agricole CIB was awarded the Most Sustainable Aviation Bank twice consecutively in 2023 and 2024 and the APAC Bank of the Year 2024 by Airline Economics.
How does it work?
Under the SLL framework designed by Crédit Agricole CIB, Cebu Pacific has set targets to reduce the carbon emission intensity of its aircraft fleet, particularly through modernization towards more advanced and fuel-efficient aircraft, which, if met, will provide financial incentives. the airline
Delivered to the airline last December 24, the brand new Airbus A321NEO, with improved fuel-efficiency over the previous generation, will contribute to Cebu Pacific's carbon emission intensity reduction objectives as the airline moves towards transitioning to an all-NEO fleet by 2028.