Ayala unit divesting from coal, eyes 100% renewables by 2025

posted October 19, 2021 at 07:30 pm
by  Alena Mae S. Flores
AC Energy Corp., the energy unit of Ayala Corp., announced Tuesday its commitment to transition the company’s generation portfolio to 100-percent renewable energy by 2025 as it expands here and abroad while spinning off its coal assets.

AC Energy initiated moves to ensure compliance with the commitment during a special board meeting on Oct. 18, the company said in a disclosure to the stock exchange.

This includes the spin-off of coal assets and expansion of RE portfolio both in the domestic and international markets.

The board also approved the acquisition by the company, through subsidiary AC Renewables International Pte. Ltd., of the remaining 51.6-percent ownership interest of UPC Renewables Asia Pacific Holdings Pte Ltd. and Anton Rohner in UPC-AC Renewables Australia, their joint venture holding company for Australian energy and power projects and investments, for up to $243.3 million.

The transaction will raise AC Energy’s ownership in the renewables development platform to 100 percent.

“This transaction marks a strategic pivot for ACEN, as the company embarks on its first wholly-owned development and operations platform outside of the Philippines”, said AC Energy president and chief executive Eric Francia.

“We are excited to scale up investment in our Australia platform, as we expect the country to accelerate its energy transition,” Francia said.

AC Energy’s board also approved the commitment to achieve net zero by 2050. Net zero is a global movement to achieve zero net greenhouse gas emissions to limit global warming to 1.5 degrees Celsius by 2050.

The board granted authority to management to work towards the early retirement of South Luzon Thermal Energy Corp. by 2040 or 15 years ahead of its technical life through the use of Energy Transition Mechanism.

ETM is an innovative funding mechanism that leverages low-cost and long-term funding geared towards early coal retirement and reinvestment of proceeds to enable renewable energy.

“We remain committed to AC Energy group’s coal divestment policy. In the case of SLTEC, we will ensure that the divestment process incorporates the just transition approach,” said Francia.

“This means that we will work towards an early retirement of SLTEC coal plant, targeting 2040 or 15 years earlier than its technical life, and transition SLTEC to a cleaner technology. We plan to leverage the innovative energy transition mechanism that will enable the early retirement of coal plants and recycle capital into renewable energy projects,” he said.

The board appointed BPI Capital Corp. as lead arranger for the ETM of SLTEC, which owns the 275-megawatt coal-fired power plant in Calaca, Batangas.

AC Energy said the board approved the spin-off of thermal assets by 2025 and enter a property-for-share swap with subsidiary ACE Enexor Inc. where the company will assign 100 percent of its equity in Palawan 55 Exploration and Production Corp., Bulacan Power Generation Corp., One Subic Power Generation Corp., CIP II Power Corp. and Ingrid3 Power Corp., valued at P3.39 billion, in exchange for 339 million ACEX primary shares at P10 per share, as supported by a fairness opinion from FTI Consulting Philippines Inc.

The move is subject to compliance with applicable regulatory requirements.

The ACEN board also approved to underwrite ACEX’s stock rights offer of P1.053 billion in relation to the share swap. Also approved is ACEN’s acquisition, directly or through its nominated affiliate, of the ownership interest of UPC Philippines Wind Investment Co. BV and Stella Marie L.Sutton in North Luzon Renewable Energy Corp. (the owner and operator of an 81-MW operating wind farm in Caparispisan, Pagudpud, Ilocos Norte), Bayog Wind Power Corp. (owner of the 160-MW Pagudpud Wind that is under construction in Balaoi, Pagudpud, Ilocos Norte), special purpose vehicles Buduan Wind Energy Co. Inc, Pangasinan UPC Asia Corp., Caraballo Mountains UPC Asia Corp., Sapat Highlands Wind Corp., and pipeline SPVs Itbayat Island UPC Asia Corp., Laguna West Renewables, Inc. and Suyo UPC Asia Corporation, for an aggregate consideration of up to P4.5 billion.

AC Energy received approval to acquire, directly or through its affiliate, the 32.2-percent ownership interest of the minority stockholders of Northwind Power Development Corp. for up to P1.093 billion.

The board also approved the joint venture with CleanTech Global Renewables, Inc. for the 200-MW Lal-lo Solar Power Project in Lal-lo, Cagayan.

AC Energy has about 2,600 MW of attributable capacity in the Philippines, Vietnam, Indonesia, India and Australia. Its aspiration is to be the largest listed renewables platform in Southeast Asia, with a goal of reaching 5,000 MW of renewables capacity by 2025.

Topics: AC Energy Corp. , Ayala Corp. , renewable energy
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