Solar Philippines Tarlac Corporation (Solar Tarlac), a subsidiary of renewable energy firm Solar Philippines, is planning to raise P4.15 billion from the issuance of green bonds.
The proposed green bonds has been assigned a high credit rating of PRS Aa plus with a Stable Outlook by the Philippine Rating Services Corporation (PhilRatings.
Solar Tarlac is a joint venture between Solar Philippines Power Project Holdings, Inc. (Solar Philippines) and tycoon Enrique Razon’s Prime Metro Power Holdings Corporation (Prime Power).
In 2020, the two companies entered into a strategic partnership to develop the country’s largest portfolio of solar projects.
Proceeds of the bonds would be used to refinance a P2.225 billion loan used for the construction of Solar Tarlac’s now operating 100 MW solar plant in Concepcion, Tarlac, and to fund the expansion of the plant to 150 MW.
“Obligations rated PRS Aa are of high quality and are subject to very low credit risk. The obligor’s capacity to meet its financial commitments on the obligation is very strong,” PhilRatings said.
A Stable Outlook means the rating is likely to be maintained or to remain unchanged in the next 12 months.
In the assignment of the rating and outlook, PhilRatings considered “the significant market position in the solar energy industry of the Project Sponsors, albeit with a relatively short track record.”
It also noted the “very manageable construction risk; asset and customer concentration risk; and market risk mitigated with a 20-year Take-or-Pay Power Purchase Agreement with Manila Electric Company (Meralco) and established solar irradiation data.”
PhilRatings also cited “the general economic uncertainty due to the pandemic, but with opportunities which will benefit the company.”
Solar Tarlac’s sister company Solar Philippines Nueva Ecija Corporation (SPNEC) is the developer of a 500 MW solar project that is planned to be the largest solar project in Southeast Asia.
SPNEC is planning to raise up to P2.7 billion from a planned initial public offering, with the first P1.3 billion raised primarily to be used to complete the first 50 MW of the project, and amounts raised in excess of P1.3 billion primarily to be used to acquire land to expand the project beyond 500 MW.
SPNEC’s offer period is planned for December 1 to 7, 2021, with a tentative listing date on the Main Board of the PSE on December.