With a greenlight from its board of directors, Ayala-led ACEN Corporation has agreed to advance P1.139 billion loan to its partner firm Natures Renewable Energy Development Corporation (NAREDCO), a wholly owned subsidiary of Filipino-led CleanTech Global Renewables Inc., to start construction of the 200-megawatt Lal-lo solar farm project in Cagayan province.
The Ayala firm qualified that it inked a loan and security agreement with NAREDCO, along with its subsidiary CleanTech Renewable Energy 4 Corp (CREC4), which serves as a corporate vehicle for the solar farm development.
According to ACEN, “NAREDCO has agreed to secure the loan with parcels of land where the Lal-lo solar power project will be located as well as CREC4's shares in NAREDCO.”
It added that the loan to be extended by ACEN would “provide NAREDCO short-term financing to allow early issuance of NTP (notice-to-proceed)” to the project’s engineering, procurement and construction (EPC) contractor.
“ACEN will be repaid from the proceeds of the third-party project finance or NAREDCO’s issuance of additional RPS (redeemable preferred shares) in favor of ACEN,” the Ayala energy firm expounded.
Relative to that development in the project’s implementation, the board of directors of the Ayala energy firm likewise approved the joint venture deal with the subsidiary of Filipino firm CleanTech Global Renewables Inc.
The board approval was a follow-through to the signing of shareholders’ agreement between ACEN subsidiary ACE Endevor Inc. and NAREDCO -- and that was consummated in March this year.
The Lal-lo solar farm installation has a renewable energy service contract that was granted by the Department of Energy (DOE) to CleanTech Renewable Energy 4 Corp (CREC4), which is a subsidiary of NAREDCO – and their parent firm is CleanTech Global Renewables.
With the targeted 50:50 equity partnership deal, the Ayala energy company indicated that the solar farm installation “will potentially add more than 100MW of renewable energy to the company’s power generation portfolio.”
The Ayala firm emphasized that among the conditions precedent to the finalization of the tie-up deal will be approval of the Securities and Exchange Commission (SEC) of NAREDCO’s “application for increase of authorized capital stock; and the creation of redeemable preferred shares.” (MMV)