 Meralco Powergen Corporation (MGEN) and its subsidiary, Solar Philippines New Energy Corporation (SPNEC) have agreed to enter into a strategic partnership with Actis to invest in a 40% equity stake in Terra Solar Philippines, Inc. (Terra Solar) – poised to be the biggest integrated renewables and energy storage power plant in the world. SPNEC will cause the issuance of Terra Solar shares equivalent to a 40% equity stake upon closing in Terra Solar for a total consideration of c.US$600 million to Actis, a leading global investor in sustainable infrastructure with deep project execution and contract management expertise. The proceeds will be used to jointly develop and expand Terra Solar.
Terra Solar is the world’s largest integrated renewables and energy storage project1, with 3,500MWp of installed PV capacity and 4,500MWh of installed BESS capacity. The project is expected to cover c.3,500 hectares. Around 2.4 million households in the Philippines will be powered by Terra Solar. In line with the government’s vision to increase renewable energy generation to 35% by 2030, MGEN and SPNEC are paving the way for Terra Solar that would accelerate its footprint in the green energy space and significantly expand its power generation portfolio. Terra Solar Project Highlights
Manuel. V. Pangilinan, Chairman and CEO of Manila Electric Company (“MERALCO”), parent company of MGEN, said: “Terra Solar is one of the most ambitious renewables projects the world has ever seen. We are looking forward to contributing to the Government’s goal to have 35% of the country’s energy to come from renewable energy.” Emmanuel V. Rubio, President and CEO of MGEN and SPNEC, commented: “We are delighted to be partnering with Actis, a world-class investor of sustainable infrastructure, in this monumental project. We look forward to the combined expertise of Meralco Power Generation, SPNEC and Actis that will bring the Terra Solar project into reality.” Lucy Heintz, Partner, Head of Energy Infrastructure at Actis, commented: “The scale of the Terra Solar Project and its capacity to provide clean power is enormous. It’s the single biggest such project in the world and Actis’ investment in the project marks an exciting moment. As a new investor in the project, Actis will bring its decades’ worth of expertise investing in global scale energy generation. We’re in the business of building and operationalising world-class energy assets both to accelerate the energy transition and deliver value for our investors. This investment will do that, on a truly significant scale.” Rahul Agrawal, Head of Energy for Southeast Asia at Actis, said: “Southeast Asia represents some of the most dynamic economies globally and the region’s energy transition is picking up speed. Philippines is showing real purpose on the energy transition and no project represents this more than the Terra Solar Project. It will co-locate solar PV with battery storage on a scale the region hasn’t seen before, backed by a sizeable PSA, to deliver a stable renewable power supply to the main grid of Luzon in the Philippines. MGen and its management team’s vision for this project is truly exceptional and we are excited about the partnership with MGen to together build this landmark project.” Transaction completion is subject to the satisfaction of certain conditions precedent, including the relevant regulatory approvals, and is expected to be completed by Q1 2025. UBS AG Singapore Branch acted as financial advisor to SPNEC. Latham & Watkins and Picazo Law acted as international and domestic legal counsel to SPNEC. Meralco is the largest private sector DU in the Philippines covering 39 cities and 72 municipalities with a franchise area of c.9,685km2, which accounts for c.55% the Philippines’ electricity consumption. MERALCO is listed on the Philippine Stock Exchange (“PSE”), with a market capitalization of US$8.1bn / PHP 457.5bn as of 5 Sep 2024. MERALCO’s principal shareholders are Beacon Electric Asset Holdings, Inc. 34.96%, Metro Pacific Investments Corporation 12.50%, JG Summit Holdings, Inc. 26.37%, and Others (including free float) 26.17%. MGen is a wholly owned subsidiary of Meralco, the country’s largest private sector electric distribution utility company. The growing MGen group, with a total power generation gross capacity of 2,425 MW that utilize coal, liquified natural gas, diesel, and solar technologies, is capable of supplying base, intermediate, peak load, and ancillary support. To support the country’s transition towards a sustainable future, MGen puts a premium to its goal of adding 1,500MW of renewable energy to its current portfolio. MGen owns and operates its Renewable Energy projects under its Renewable Energy arm, MGREEN. SPNEC is an integrated developer, owner and operator of solar power projects in the Philippines. SPNEC is PSE-listed with a market capitalization of US$1.2bn / PHP 65.1bn as of 5 Sep 2024. SPNEC is a subsidiary of Meralco and specializes in creating value through land identification, acquisition and conversion, which is used to develop solar project. Actis is a leading global investor in sustainable infrastructure, delivering competitive returns for institutional investors and measurable positive impact for countries, cities, and communities in which it operates. Actis invests in structural themes that support long-term, equitable growth in defensive, critical infrastructure across energy transition, digitalization transition, and supply chain transformation.
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