Cebu Pacific Secures Southeast Asia’s First Sustainability-Linked Loan for Low-Cost Airlines

Cebu Pacific (CEB) has made history by securing Southeast Asia’s first Sustainability-Linked Loan (SLL) for a low-cost carrier. This landmark deal highlights CEB’s commitment to decarbonizing its operations and reinforces its leadership in sustainable air travel within the region.

The loan was arranged by Crédit Agricole CIB and structured under a Japanese Operating Lease with Call Option (JOLCO). As part of the SLL, CEB has committed to performance targets aimed at reducing the carbon emission intensity of its aircraft fleet. Meeting these targets will result in financial incentives for the airline under the loan.

“Cebu Pacific’s first sustainability-linked aircraft financing is a milestone in our decarbonization journey, as the transaction supports the core element of our program—the modernization 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 decarbonization leader in the region,” said Mark Cezar, CEB Chief Financial Officer.

The loan has facilitated the acquisition of a brand-new Airbus A321neo, which was delivered to the airline on December 23, 2024. The new engine option (NEO) aircraft, with improved fuel efficiency compared to previous generations, will contribute to CEB’s carbon emission reduction goals as it progresses toward transitioning to an all-NEO fleet by 2028.

Crédit Agricole CIB, the corporate and investment banking arm of the Crédit Agricole Group, served as the sole Sustainability Advisor, JOLCO Arranger, and Mandated Lead Arranger for the debt.

“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 decarbonization 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,” said Bertrand Rovetto, Crédit Agricole CIB Head of Aviation Group Asia-Pacific.

The SLL represents a critical step in CEB’s broader efforts to integrate sustainability into its financial and operational strategies. As the airline enters 2025, it aims to maintain its leadership in the domestic aviation sector, set a benchmark for the industry, and champion sustainable air travel.