Transitioning to a cleaner future: Ayalas sell remaining coal power asset for P3.7B

ACEN, the Ayala Group’s listed energy platform, approved the divestment of all its shares in wholly-owned subsidiary South Luzon Thermal Energy Corp. (SLTEC) through energy transition financing.

SLTEC, which owns the 244 MW coal plant in Calaca, Batangas, is the only coal plant under ACEN’s portfolio.

The shares will be acquired by ETM Philippines Holding Inc.. (EPHI) and The Insular Life Assurance Co. Ltd. for ₱3.7 billion.

ACEN will use the proceeds from the divestment to invest in more renewable energy projects.

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 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 the joint lead arrangers for this transaction.

CLSA Philippines Country Head Mitzi De Dios sid the company 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 pioneering deal will allow the early retirement and transition of our coal plant to cleaner technology,” said ACEN chief executive officer Eric Francia.ñ
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Together with Ayala Corporation, ACEN announced last November 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.

ACEN has about 3,900 MW of attributable capacity in the Philippines, Vietnam, Indonesia, India, and Australia, of which 87 percent comes from renewables.

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