AC Energy lends P1 billion to Solar Philippines unit to fund new projects

MANILA, Philippines — AC Energy Corp. is extending a P1-billion loan to a subsidiary of Solar Philippines Power Project Holdings Inc. to develop solar power projects in the country.

In a disclosure to the stock exchange on Monday, the Ayala-led power company said it signed the loan deal with Provincia Investment Corp. last June 25, with Solar Philippines acting as sponsor under the agreement.

The loan deal is part of AC Energy’s partnership with Solar Philippines, the company of businessman Leandro Leviste, son of Antique Rep. Loren Legarda. Under the agreement, Provincia Investment mortgaged to AC Energy the company’s real assets and its parent’s stake in one of its fully-owned subsidiaries.

Earlier this year, AC Energy signed binding agreements with Provincia Investments for potential joint ventures, and took over Solar Philippines Central Luzon Corp. (SPCLC), another unit of Solar Philippines, to develop and operate solar plants in Central Luzon. The acquisition of SPCLC, in turn, allows AC Energy to earn stable dividend income from the operations of the solar power projects.

Solar Philippines is planning to construct over one gigawatt (GW) of solar projects in the provinces of Batangas, Cavite, Nueva Ecija and Tarlac. If realized, the projects would include the first, second and third largest solar projects in the Philippines to date.

This bodes well with the Ayala Group’s ambitious target to be Southeast Asia’s largest renewables producer by 2025. This was coupled with a goal to offload all of its investments in coal power by 2030 as it joins major conglomerates around the world in shifting to clean energy.

AC Energy earlier announced it would finance the construction of two new solar plants cumulatively worth P6.1 billion in Central Luzon that would generate a combined energy output of 150 megawatts (MW) by 2022. The company is also investing in wind power in Vietnam.

As of 12:10 p.m., shares in AC Energy were rallying 2.44%, bucking a downturn in the main index.