Philippine low-cost carrier Cebu Pacific closed a sustainability-linked (SLL) Japanese operating lease with call option (JOLCO) for one new A321neo. The transaction marks the airline's first-ever sustainable aircraft financing as well as the first SLL from a low-cost airline in southeast Asia.
“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,” said Cebu Pacific chief financial officer Mark Cezar. “With this deal, we want to emphasise 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.”
Under the SLL structure designed by Credit Agricole CIB, Cebu Pacific has set targets aiming at reducing the carbon emission intensity of its aircraft fleet, such as more advanced and fuel-efficient aircraft. If these targets are met, the airline will be provided with financial incentives.
“We have built-in a financial incentive mechanism rewarding the airline's progress towards their net zero ambition,” said Credit Agricole CIB head of aviation group Asia-Pacific Bertrand Rovetto.
The aircraft was delivered to the airline on December 23, 2024. The airline is moving to an all-NEO fleet by 2028, which will contribute to its carbon intensity reduction targets.
Credit Agricole CIB acted as the sole sustainability advisor, JOLCO arranger and mandated lead arranger.