Cebu Pacific (PSE: CEB), the Philippines’ largest airline, has made a historic move by securing Southeast Asia’s first Sustainability-Linked Loan (SLL) for a low-cost carrier. This groundbreaking deal underscores CEB’s commitment to decarbonizing its operations and strengthens its position as a regional leader in sustainable aviation.
The loan, arranged by Crédit Agricole CIB, is structured under a Japanese Operating Lease with Call Option (JOLCO). As part of the agreement, Cebu Pacific has set specific performance targets to reduce the carbon emission intensity of its aircraft fleet. Achieving these goals will result in financial incentives for the airline.
“This milestone financing is a key part of our decarbonization journey. It directly supports our fleet modernization program, which is focused on transitioning to more advanced and fuel-efficient aircraft,” said Mark Cezar, Cebu Pacific’s Chief Financial Officer. “Through this deal, we are sending a clear message that financing for sustainability initiatives is available, and Cebu Pacific is fully embracing such opportunities to lead decarbonization efforts in the region.”
The loan has been used to acquire a new Airbus A321neo, delivered to Cebu Pacific on December 23, 2024. The A321neo, known for its improved fuel efficiency, will help the airline meet its carbon reduction targets as part of its goal to transition to an entirely NEO fleet by 2028.
Crédit Agricole CIB, the corporate and investment banking arm of the Crédit Agricole Group, acted as the sole Sustainability Advisor, JOLCO Arranger, and Mandated Lead Arranger for the loan.
“We are thrilled to have partnered with Cebu Pacific to structure their first sustainability-linked aircraft financing. As pioneers in sustainable finance, Crédit Agricole CIB is committed to supporting our clients in their decarbonization goals. This deal includes a financial incentive mechanism that rewards Cebu Pacific’s progress toward its net-zero objectives, and we look forward to many more sustainability-driven collaborations,” said Bertrand Rovetto, Head of Crédit Agricole CIB’s Aviation Group in Asia-Pacific.
This SLL marks a significant step in Cebu Pacific’s broader strategy to incorporate sustainability into its financial and operational practices. Looking ahead to 2025, the airline plans to continue leading the domestic aviation sector, setting industry standards, and advancing sustainable air travel.
