Portfolio guarantee of $15m covering sustainability-linked projects in south Asia as part of a $410m securitised issuance of infrastructure asset backed securities (IABS). Renewables make up the majority of sustainability assets and will be independently verified in line with International Capital Markets Association (ICMA) and ASEAN+3 sustainability bond standards.
SDG 7+13 + 17.3 – Mobilise financial resources to increase the share of renewable energy and contribute to climate change mitigation.
Expected impact: Bayfront will acquire loans from banks to free up their capital so they can make new loans to renewables in eligible countries within PIDG’s mandate. This will avoid new greenhouse gases (GHG) emissions for the planet.
Challenge: There is insufficient financing available for bankable infrastructure projects in south Asia. Institutional capital finances projects post construction when cashflows are long-term and predictable and risks significantly lower.
Channel: Demonstrate first-of-its-kind commercial credit enhancement instrument within a securitisation structure in Asia, enabling the issuance of an underlying B-rated tranche. This is expected to increase secondary market liquidity, freeing up more capital to finance new sustainable infrastructure assets in PIDG eligible markets.
Outcome: Attract new, high-quality investors to sustainability assets in PIDG eligible markets for the first time through this issuance. In the medium to long run, this should increase investor appetite and access to capital for this asset class.
Mobilised $128m of capital from private sources to invest in PIDG eligible markets.
Transition risk: Our guarantee is exclusively linked to the sustainable tranche so therefore deemed low.
Resilience: Bayfront has incorporated climate risk assessment in the due diligence and monitoring process for sub-projects.
In 2023, women made up 40% of Bayfront’s senior management team and 44% of Bayfront’s overall workforce (governance and workforce). Bayfront endeavours to maintain at least 35% of women in senior leadership positions over the next five years.
As part of the due diligence process, five HSES improvements were identified which are now reflected in the Project Environmental and Social Action Plan (ESAP).
