ATN Holdings Inc. is planning to list its solar power subsidiary by way of introduction and then raised funds from a follow-on offering to take advantage of growing demand for renewable energy sources.
In a disclosure to the Philippine Stock Exchange, ATN said its chairman informed the Board of Directors and discussed energy industry opportunities open to ATN Philippines Solar Energy Group, Inc. (ATN Solar).
This is in light of the projected power supply deficit arising from project delays due to the COVID-19 pandemic.
After discussions, the firm’s board decided to enter into a Joint Venture Agreement with key energy partners for the establishment of 50MW to 100MW Solar PV Project in ATN’s 256-hectare property in Montalban, Rizal.
ATN Philippines Solar Energy Group Inc. will also apply for Listing by Introduction in the Philippine Stock Exchange, follow-on offering, and appoint an Investment banking group and Underwriter for this purpose.
The firm will also co-invest with Transpacific Broadband Group International, Inc. (TBGI) the total amount of P2 billion for its equity participation in the consortium to be formed with the winning bidder of the Meralco competitive selection process (CSP) of renewable solar energy under a 20-year contract.
ATN said it is timey to venture into the renewable energy business considering the phase out of coal power plants under COP 26 and the difficulties in coal supply due to global mitigation activities to arrest climate change.
“Coal export ban of Indonesia affected 30 million tons per year of coal supply to the Philippines, exacerbating power deficit on the 12,000 MW demand in Luzon,” it added.
ATN also noted the “Cancellation of project financing for coal power plants due to (a) high bank risk provisioning, (b) program to phase out coal power plants in the Philippines under COP 26, and (c) strict compliance to the global Environment Social and Governance ESG guidelines.”
ATN said ATN Solar’s commissioning will coincide with the dwindling supply of Malampaya gas that is projected to run out in 2024 and take out 3,000 MW or 25 percent of total 12,000 MW demand in Luzon.
The firm also noted exponential growth and opportunities in renewable energy with Meralco Expansion of Climate Change financing for clean energy generation.
It also cited the significant reduction of capital cost of solar power that results to levelized cost of less than P3.00 per kilowatthour and the compliance to Renewable Portfolio Standard (RPS) provides solar projects opportunity to construct and realize cash flow quickly for variable power supply.
ATN Solar’s levelized cost of solar power is P4.00 per kWh, based on net capacity factor of 16.2 percent or an average insolation of 3.9 hours per day.
As an embedded power generator in the Meralco power distribution network, ATN Solar power plant has competitive advantage in terms of reduced probability of congestion of nodes in the 6 KM embedded connection asset pathway of ATN Solar power in the Meralco franchise network.
Congestion of nodes translates to less penalties in the transmission of ATN Solar electricity that the far-flung power generators otherwise pay NGCP and Meralco.