ACEN sells last coal asset to EPHI, InLife

BY LENIE LECTURA – JULY 26, 2022
from Business Mirror

ACEN Corp. is selling its remaining coal asset to ETM Philippines Holdings, Inc. (EPHI) and The Insular Life Assurance Company, Ltd. (InLife) for P3.7 billion.

“ACEN, the Ayala Group’s listed energy platform, approved the divestment of all its shares in its wholly-owned subsidiary, South Luzon Thermal Energy Corporation (SLTEC), through energy transition financing,” it said in a disclosure to the stock exchange Tuesday.

The sale of the 244megawatt (MW) coal plant in Calaca, Batangas is subject to regulatory approval.

ACEN said it will use the proceeds from the divestment to invest in more renewable energy (RE)  projects. “This pioneering deal will allow the early retirement and transition of our coal plant to cleaner technology,” said ACEN Chief Executive Officer Eric Francia.

EPHI is a special purpose vehicle that allows financial investors to invest in energy transition by accelerating the retirement of coal-fired power plants, and to fund the development of new clean energy technologies. ACEN approved the provision of bridge financing to EPHI to facilitate its investment in SLTEC while providing prospective financial investors a vehicle to participate in energy transition.

“As a Filipino company with more than 100 years of service and commitment to the nation, we welcome the opportunity to participate in this pioneering deal to promote a sustainable environment for the country’s future,” said InLife President and CEO Raoul E. Littaua.

This transaction shall serve as a pioneer energy transition financing in the country. It takes off from the principles of the Energy Transition Mechanism (ETM) piloted by the Asian Development Bank (ADB), which aims to leverage a market-based approach to accelerate the transition from fossil fuels to clean energy.

BPI Capital and CLSA are Joint Lead Arrangers for this transaction. “CLSA is proud to play a part in funding the country’s first energy transition financing, which will play an essential role in allowing countries in Asia Pacific realize their climate goals. This forms part of CLSA’s core sustainability values,” said CLSA Philippines Country Head Mitzi De Dios.

BPI Capital and AlphaPrimus Advisors, Inc. acted as Joint Financial Advisors for this transaction.

ACEN hopes the sale will generate momentum for the just energy transition in the region, and help towards the achievement of Net Zero.

ACEN announced in November last year its commitment to Net Zero greenhouse gas emissions by 2050. Through this energy transition mechanism, SLTEC’s coal power plant will be decommissioned by 2040, 15 years ahead of the end of its technical life and transitioned into cleaner technology. Lenie Lectura