ACEN finalizes loan deal with banks

BY LENIE LECTURA – APRIL 11, 2022
from Business Mirror

AC ENERGY Corp. (ACEN) has finalized an amended and restated omnibus loan and security agreement for its wholly-owned subsidiary, South Luzon Thermal Energy Corp. (SLTEC), with the Bank of Philippine Islands and Rizal Commercial Banking Corp.

It said Monday that the loan facility–up to P13.7 billion– is intended to refinance SLTEC’s outstanding P9.8 billion loan facility; fund the partial redemption of capital in SLTEC held by ACEN; and finance other transaction-related expenses.

ACEN, in turn, shall use the proceeds of the equity redemption to reinvest in renewable energy projects.

ACEN earlier announced its commitment to net-zero greenhouse gas emissions by 2050 in November last year. This goal is supported by key milestones that will bring ACEN generation output to 100 percent renewable energy by 2025.

Through this mechanism, ACEN’s coal-fired power plant with a capacity of 244 MW in Calaca, Batangas shall be decommissioned by 2040, 15 years ahead of the end of its technical life. This transaction shall serve as a pioneer energy transition financing in the country.

The concept adopts the principles of the Energy Transition Mechanism (ETM) being piloted by the Asian Development Bank (ADB) in South and Southeast Asia. ETM aims to use public, private, and philanthropic financing to provide low-cost capital to coal-fired power plants to accelerate their retirement and help jumpstart reliable and affordable clean energy.

ADB had announced an ETM partnership involving the Philippines and Indonesia at COP26 in Glasgow last year. ETM is also consistent with the Department of Finance’s goal to retire coal-fired power plants and transition to clean energy.

“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,” said Eric Francia, ACEN President. “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.”

BPI Capital Corp. is the mandated lead arranger and sole bookrunner, while RCBC Capital Corporation is the lead arranger.

“Energy transition will not be possible without responsible and proactive private sector actors. We commend the Ayala group and ACEN for the signing of this groundbreaking transaction, which is consistent with ADB’s Energy Transition Mechanism to provide a pathway from fossil fuels to renewable energy.

Their actions demonstrate that we can all accomplish more together, and that we have no time to wait when it comes to the accelerated decommissioning of coal-fired power,” said Ahmed Saeed, ADB Vice President.