Ayala-led ACEN Corporation has inked P13.7 billion omnibus loan and security agreement with Bank of the Philippine Islands (BPI) and Rizal Commercial Banking Corporation (RCBC) as energy transition mechanism (ETM) funding for its 244-megawatt South Luzon Thermal Energy Corporation’s (SLTEC) coal plant for eventual phaseout and have it replaced with renewable energy (RE) facilities.
In a statement to the media, the Ayala firm noted that part of the credit facility will be funneled to refinance the P9.8 billion loan that had been accessed to bankroll the SLTEC project, and the rest to fund the partial redemption of capital in the coal plant asset by ACEN.
The company further indicated that the proceeds of ACEN’s equity redemption will be utilized to “reinvest in renewable energy projects.”
The phaseout of the SLTEC coal plant in ACEN’s portfolio will considerably mark the Ayala group’s departure from thermal power facilities and to reach its goal as a 100-percent RE company in the next three years – to be underpinned by capacity buildup reaching 5,000 megawatts.
“This goal is supported by key milestones that will bring ACEN generation output to 100% renewable energy by 2025,” the Ayala company reiterated.
Cora G. Dizon, chief finance officer of ACEN, emphasized that “leveraging on sustainable policies and clean energy funding are essential for ACEN to sustain its leading position in renewable energy development and net zero ambition.”
The ETM-anchored financing extended by BPI and RCBC for the SLTEC plant will shorten the facility’s life by 15 years and this will already be slated for retirement in 2040.
“This transaction shall serve as a pioneer energy transition financing in the country. The concept adopts the principles of the ETM being piloted by the Asian Development Bank (ADB) in South and Southeast Asia,” the Ayala firm conveyed.
ACEN President and CEO Eric T. Francia primarily stated that “in leading the energy transition, enabling mechanisms such as the ETM help accelerate our shift to a low carbon growth path and unlock new renewable energy investments.”
By far, the Ayala company is the first energy player in the country that will be heeding the call of the Department of Finance (DOF) on the phaseout of coal plants in the country’s power mix – the target of which is to have this concretized in the next 15 years.
“It is through this shared commitment between the public and private sectors towards achieving a low carbon economy, and our collective action for a sustainable and inclusive future that we can truly make an impact on our climate goals,” Francia stressed.