ACEN Corp. secures P13.7 billion in funding for a power plant in Batangas
12 April 2022
ACEN Corp. has secured P13.7 billion in energy transition financing from the Bank of the Philippine Islands (BPI) and Rizal Commercial Banking Corp. (RCBC) for its 2×135-MW coal-fired power plant in Calaca, Batangas.
ACEN Corp. said in a filing with the Philippine Stock Exchange yesterday that it signed an amended and restated omnibus loan and security agreement with BPI and RCBC as lenders for its wholly owned subsidiary South Luzon Thermal Energy Corp. (SLTEC).
The loan facility is worth up to P13.7 billion and will be used to refinance SLTEC’s existing P9.8 billion loan facility, fund the partial redemption of capital in SLTEC held by ACEN, subject to regulatory approvals, and finance other transaction-related expenses.
ACEN Corp. will then reinvest the proceeds from the equity redemption in renewable energy projects.
“Relying on sustainable policies and clean energy funding is critical for ACEN to maintain its leadership position in renewable energy development and net zero ambition,” said ACEN chief finance officer Cora Dizon.
This transaction will serve as a pioneer in the country’s energy transition financing, and it is in line with ACEN’s plan to decommission its 244-megawatt (MW) coal-fired power plant in Calaca, Batangas under SLTEC by 2040, or 15 years before the end of its technical life.
The concept is based on the principles of the Energy Transition Mechanism (ETM) being piloted in Southeast Asia by the Asian Development Bank (ADB).
ADB vice president Ahmed Saeed praised the Ayala group and ACEN for the transaction, which is in line with the Manila-based multilateral bank’s ETM, which aims to provide a path from fossil fuels to renewable energy.
“Without responsible and proactive private sector actors, energy transition will be impossible.” “Their actions show that we can all accomplish more together, and that there is no time to waste when it comes to accelerated coal-fired power decommissioning,” he said.
The ETM intends to use public, private, and philanthropic funding to provide low-cost capital to coal-fired power plants in order to hasten their retirement and help jumpstart reliable and affordable clean energy.
Last year, at COP26 in Glasgow, ADB announced an ETM partnership involving the Philippines and Indonesia. ETM is also consistent with the Finance Department’s goal of retiring coal-fired power plants and transitioning to clean energy.
The ETM, according to ACEN president and CEO Eric Francia, will help accelerate the company’s transition to a low-carbon growth path and unlock new renewable energy investments.
“It is only through this shared commitment of the public and private sectors to achieving a low-carbon economy, as well as our collective action for a sustainable and inclusive future, that we will truly make an impact on our climate goals,” he said.
BPI Capital Corp. is the transaction’s mandated lead arranger and sole bookrunner, while RCBC Capital Corp. is the transaction’s lead arranger.
ACEN has committed to achieving net-zero greenhouse gas emissions by 2050 in collaboration with the Ayala group. This goal is backed up by key milestones that will see ACEN’s generation output reach 100 percent renewable energy by 2025.
