The Philippine energy company ACEN has completed divesting its stake in the 246 MW SLTEC coal-fired power plant through the world’s first energy transition mechanism (ETM), which funds the transition from thermal to renewables. The move will allow the early retirement of the coal-fired plant located in Batangas province, on Luzon Island (northern Philippines) and contribute to ACEN’s goal of reaching 100% renewable energy generation by 2025.
The ETM for the SLTEC plant involved PHP13.7bn (US$236m) in debt financing provided by the Bank of the Philippines Islands and Rizal Commercial Banking, as well as PHP3.7bn (US$64m) in equity investments from the Philippines’ Government Service Insurance System (GSIS), the Insular Life Assurance, and ETM Philippines Holdings. ACEN received PHP7.2bn (US$124m) from the transaction for reinvestment in renewable energy projects, which it used for refinancing debt and transaction fees.