ACEN — Project Sale to Special Purpose Vehicle

In 2022, ACEN Corporation sold its equity in the SLTEC coal plant to a special purpose vehicle (SPV), reducing the plant's operating life by 25 years to a retirement date of 2040. The transaction was enabled by the use of domestic financial institutions to provide low-cost debt and equity, as international lenders often have coal exclusion policies. The SPV re-levered the capital structure, increasing the debt/capital ratio from 0.58 to 0.79, with $247 million in debt provided by RCBC and BPI. This structure allowed ACEN to divest the asset and reinvest proceeds into renewable energy, aligning with its corporate goal of 100% renewable energy by 2025.

• ACEN Corporation reduced the operating life of the South Luzon Thermal Energy Corporation (SLTEC) coal plant by 25 years, setting a new retirement date of 2040, by selling its equity to a special purpose vehicle (SPV) in 2022.
• The transaction utilized a specific capital structure for the SPV with a debt/capital ratio of 0.79, consisting of $247 million in debt and $67 million in equity.
• Equity in the SPV was distributed among Insular Life Insurance ($9 million), the Philippines GSIS ($40 million) as preferred equity, and EPHI ($18 million), a holding company under ACEN.
• Domestic financial institutions were essential to the deal because they were willing to finance a coal asset for approximately 18 years, a condition that would be impossible for international financial institutions with coal exclusion policies.
• The transaction mitigated risk through existing contractual obligations, including a Power Purchase Agreement (PPA) requiring ACEN to offtake power until 2040 and an O&M contract.
• The divestment served ACEN's corporate strategy to pivot toward 100% renewable energy by 2025, with the proceeds from the sale earmarked for reinvestment in renewable energy projects.
• The SPV structure followed the Asian Development Bank’s (ADB) energy transition mechanism template to provide credibility to investors, although the ADB was not directly involved in the transaction.

APA

RMI (2024). ACEN — Project Sale to Special Purpose Vehicle. https://rmi.org/resources/transition-finance-case-studies-project-sale-to-special-purpose-vehicle/

Chicago

RMI. ACEN — Project Sale to Special Purpose Vehicle. 2024. https://rmi.org/resources/transition-finance-case-studies-project-sale-to-special-purpose-vehicle/.

Wikipedia

{{cite report |author=RMI |title=ACEN — Project Sale to Special Purpose Vehicle |date=25 June 2024 |url=https://rmi.org/resources/transition-finance-case-studies-project-sale-to-special-purpose-vehicle/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2024acen, author = {{RMI}}, title = {{ACEN — Project Sale to Special Purpose Vehicle}}, institution = {RMI}, year = {2024}, month = jun, url = {https://rmi.org/resources/transition-finance-case-studies-project-sale-to-special-purpose-vehicle/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }