Cebu Pacific secures sustainability-linked loan to purchase A321NEO aircraft

Philippine low-cost carrier Cebu Pacific formally closed a sustainability-linked Japanese Operating Lease with Call Option (JOLCO) for its new Airbus A321NEO, marking its first-ever sustainable aircraft financing. 

The LCC is the first airline in Southeast Asia to get approval for a sustainability-linked loan (SLL).

According to Cebu Pacific chief financial officer Mark Cezar: “Cebu Pacific’s first sustainability-linked aircraft financing is a milestone in our decarbonisation journey, as the transaction supports the core element of our programme – the modernisation of our fleet towards more advanced and fuel-efficient aircraft. 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 decarbonisation leader in the region.”

A great partner

Crédit Agricole CIB acted as the sole sustainability adviser, JOLCO arranger, and mandated lead arranger for the loan.

The bank’s leading expertise on both aviation and sustainable finance placed it in a favourable position to become Cebu Pacific’s partner of choice for its first-ever SLL.

Bertrand Rovetto, head of Crédit Agricole CIB’s aviation group in the Asia Pacific, remarked: “We are delighted to have been selected by Cebu Pacific to structure their first sustainability-linked aircraft financing. Crédit Agricole CIB is a pioneer in sustainable finance and as we are committed to supporting our clients in their decarbonisation efforts, we have built-in a financial incentive mechanism rewarding the airline’s progress towards their net zero ambition. We hope this is the first of many more sustainability-linked centered collaborations with Cebu Pacific.”

Most notably, Crédit Agricole CIB was hailed Most Sustainable Aviation Bank twice in a row in 2023 and 2024, and APAC Bank of the Year of 2024 by Airline Economics.

How does it work?

Under the SLL structure designed by Crédit Agricole CIB, Cebu Pacific has set targets aiming at reducing the carbon emission intensity of its aircraft fleet notably through its modernisation towards more advanced and fuel-efficient aircraft, which, if met, will provide financial incentives to the airline. 

Delivered to the airline last 24th December, the brand new Airbus A321NEO, with improved fuel-efficiency compared to previous generations, will contribute to Cebu Pacific’s carbon emission intensity reduction objectives as the airline progresses towards transitioning to an all-NEO fleet by 2028.