ACEN will divest all of its shares in wholly-owned subsidiary South Luzon Thermal Energy Corp. (SLTEC) through energy transition financing.
ACEN said the board of directors approved the move which is subject to regulatory approval.
ACEN said its shares will be acquired by ETM Philippines Holdings Inc. (EPHI) and the Insular Life Assurance Co. Ltd. (InLife) for an aggregate value of P3.7 billion.
ACEN said it will use the proceeds from the divestment to invest in more renewable energy projects.
SLTEC’s 244 megawatts (MW) coal-fired power plant in Calaca, Batangas is the only coal plant under ACEN’s portfolio.
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.
This transaction is also set to be a pioneer energy transition financing in the country which takes off from the principles of the Energy Transition Mechanism piloted by the Asian Development Bank which aims to leverage a market-based approach to accelerate the transition from fossil fuels to clean energy.
“This pioneering deal will allow the early retirement and transition of our coal plant to cleaner technology. We hope that this generates some momentum for the just energy transition in the region, and help towards the achievement of Net Zero,” said Eric Francia, ACEN chief executive officer, in a statement.
The company said BPI Capital and CLSA were the joint lead arrangers for the transaction while
BPI Capital and AlphaPrimus Advisors, Inc. acted as joint financial advisors.
ACEN added \ the move is part of its commitment to net zero greenhouse gas emissions by 2050 as the business decision will have SLTEC’s coal power plant to be decommissioned by 2040, 15 years ahead of the end of its technical life and transitioned into cleaner technology.
