ACEN’s Batangas coal plant to shift to clean technology

MANILA, Philippines — ACEN Corp., the energy platform of the Ayala Group, is set to pursue the Energy Transition Mechanism (ETM) to convert its 2x135-megawatt (MW) coal-fired power plant in Calaca, Batangas to cleaner technology.

In a disclosure to the Philippine Stock Exchange yesterday, ACEN said it was cleared by its executive committee to execute relevant documents to refinance South Luzon Thermal Energy Corp. (SLTEC) under an energy transition financing with certain Philippine banks as lenders.

This is in line with the board’s approval in October last year to leverage on the innovative energy transition mechanism to enable the earlier transition of the coal plant owned by ACEN’s subsidiary SLTEC to a cleaner technology.

The executive committee has also delegated the authority to finalize the terms and conditions of the sponsor documents and the list of lenders for SLTEC’s energy transition financing to president Eric Francia and CFO Maria Corazon Dizon.

In October last year, ACEN received board approval to retire the SLTEC plant by 2040, 15 years ahead of its technical life.

SLTEC is the ACEN Group’s remaining coal asset.

The early retirement of the coal plant will be done through the ETM, which was introduced by the Asian Development Bank.

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.

At that time, the ACEN board appointed BPI Capital Corp. as lead arranger for the ETM for SLTEC.

Tapping the ETM is part of ACEN Group’s coal divestment policy through a just transition approach, Francia said earlier.

In 2020, ACEN announced its transition to a low carbon future and coal divestment plan by 2030.

In the same year, the company launched an Environment and Social Policy (E&S), which aims to transition to a low carbon portfolio by 2030.

Aligned with the United Nations Sustainable Development Goals, the policy will be integrated into the company’s business strategies, performance management and governance.

With the adoption of the E&S policy, the company will focus on renewable investments and will not make additional investments in coal plants.

In October last year, the entire Ayala Group announced its commitment to net zero greenhouse gas emissions to limit global warming by 1.5 degrees by 2050.

As part of the group’s net zero journey, ACEN’s board also approved the company to transition its generation portfolio to 100 percent renewable energy by 2025.

ACEN aspires to be the largest listed renewables platform in Southeast Asia, with a goal of reaching 5,000 MW of renewables capacity by 2025.