ACEN is the renewable energy platform of the Ayala group.
In 2019, Ayala acquired a listed energy platform and thereafter infused its Philippine renewable operating assets and development pipeline. The combination resulted in 532MW of generation portfolio in the Philippines, consisting of a 246MW Coal fired power plants (CFPP), 134MW of various diesel plants, and 152MW of various renewable energy plants.
The listed platform, ACEN, aspires to blaze the trail in energy transition across Asia Pacific. ACEN committed to Net Zero GHG by 2050, and is transitioning to 100% renewables generation by 2025. The company initially set a bold target of reaching 5GW of renewables by 2025.
ACEN currently has over 4500MW of attributable capacity of which 98% is from renewable sources. In the last five years, the company expanded beyond the Philippines and has meaningful presence in Australia, Vietnam, Laos, Indonesia, India and the US.
Pioneering Energy Transition Mechanism Initiative
Energy transition requires both the scaling up of renewables and the orderly retirement of fossil fuel plants, with primary focus on CFPPs and diesel plants.
To this end, ACEN focused on scaling up its solar and wind energy investments and pipeline development over the last 5-6 years, and expanded its geographic footprint. The company’s attributable renewables capacity for projects in operations and under construction increased from 152MW to over 4400MW today. ACEN recently announced its 2030 vision which is to reach 20GW of renewables capacity by 2030.
Aside from scaling up renewables, ACEN is also pioneering initiatives in early coal retirement. The company successfully implemented the world’s first market-based Energy Transition Mechanism which reached financial close in November 2022.
The transaction involves the divestment and early retirement of the 246MW coal plant, and its transition to cleaner technology by 2040 when the CFPP completes 25 years of operations. As the operating life of CFPP’s typically reach up to 50 years, the groundbreaking ETM initiative reduces up to 50mn tons of carbon emissions.
The company may also follow a similar approach with its remaining diesel plants. Other legacy diesel plants have already been decommissioned or divested in the last two years.
The ADB promoted the ETM concept, which leverages public and private investments with the aim of retiring coal power assets on an earlier schedule than if they remained with their current owners. ACEN decided to apply the ETM concept to the divestment of its 246MW CFPP. 100% of the net proceeds to ACEN will be used for renewable energy investments.
ACEN’s ETM was supported by debt and equity investors from the Philippines, with a total transaction value of USD 310mn. Proceeds from the ETM were used to refinance the debt, cover transaction expenses, and generate ~P7.2bn of proceeds to ACEN that will enable construction of renewable energy plants.
Energizing Change: Actis at the Forefront of Sustainable Development and COP28 Initiatives
The COP28 conference offers a huge opportunity to advance the commitment to global climate mitigation and adaptation strategies. In addition, the concept of a Just Transition – one that is carried out in an equitable manner and takes into consideration issues such as gender equality, the social context, and local employment – rightly looms larger than at any prior COP. And, given the event is being held in a region which leads world hydrocarbon output we expect a sharpened focus on transitioning out of a fossil fuel-based economy to a clean energy-based one.
Actis is already playing a significant part in helping meet the world’s climate goals. We are one of the leading investors, developers and owners of clean energy in the emerging markets. We have built 35 energy generation companies since inception, 20 of which are renewable generation businesses. We have owned and operated around 20,000 MW of clean energy across Africa, Asia and Latin America. We have contributed to the avoidance of over 30 million tonnes of CO2. We have a focus on impact, and sustainability is at the heart of everything we do. We are firm believers in the notion that values drive value; that our focus on driving for sustainability outcomes also drives financial value.
