ACEN signs $262.8m loan agreement for SLTEC

Proceeds of equity redemption will be reinvested into renewable energy projects.

ACEN has signed a loan facility worth around $262.8m (P13.7b) that will provide funding to refinance the loan facility of its wholly-owned subsidiary South Luzon Thermal Energy Corporation (SLTEC).

In a statement, ACEN said the Bank of the Philippine Islands and the Rizal Commercial Banking Corporation are the lenders for the amended and restated omnibus loan and security agreement. 

The loan facility said that the amount will be used to refinance its subsidiary’s outstanding $187.96m (P9.8b) loan facility, fund the redemption capital in SLTEC held by ACEN which is subject to regulatory approvals, and finance other transaction-related expenses.

ACEN will allot the proceeds of equity redemption to be reinvested in renewable energy projects.

The company last year committed to achieve net-zero greenhouse gas emission by 2050 in November last year by bringing its generation output to 100% renewable energy by 2025.  With this, ACEN’s  244-megawatt coal-fired plant in Calaca, Batangas will be decommissioned by 2040 which is 15 years ahead of the end of its technical life.

This is in line with the “Energy Transition Mechanism” (ETM) piloted by the Asian Development Bank in the South and Southeast Asia which aims to use public, private, and philanthropic financing to provide low-cost capital that will accelerate the retirement of coal-fired plants.

“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 ACEN President and CEO Eric Francia. 

“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,” he added. 

$1 = P52.14