ACEN — Project Sale to Special Purpose Vehicle

This case study examines the managed phaseout of the South Luzon Thermal Energy Corporation (SLTEC) coal plant in the Philippines. In 2022, ACEN Corporation sold its equity in the plant to a special purpose vehicle (SPV), reducing the plant's operating life by 25 years to a retirement date of 2040. The transaction utilized a structure based on the Asian Development Bank's energy transition mechanism to lower the cost of capital and facilitate ACEN's transition toward 100% renewable energy by 2025.

• In 2022, ACEN Corporation sold 100% of its equity in the South Luzon Thermal Energy Corporation (SLTEC) coal plant to a special purpose vehicle (SPV), which effectively reduced the plant's operating life by 25 years, setting retirement for 2040.
• The SPV restructured SLTEC's capital by replacing high-cost equity with lower-cost debt and equity from institutional investors, increasing the debt/capital ratio from 0.58 to 0.79.
• The SPV was capitalized with $247 million in debt provided by RCBC ($123.5 million) and BPI ($123.5 million), and $67 million in equity from Insular Life Insurance ($9 million), the Philippines GSIS ($40 million), and EPHI ($18 million).
• The transaction relied on domestic financial institutions in the Philippines to provide debt and equity for a coal asset for approximately 18 years, a requirement that would have been impossible for international financial institutions with coal exclusion policies.
• Risk for financiers was mitigated by a Power Purchase Agreement (PPA) obligating ACEN to offtake power from SLTEC until 2040, as well as an O&M contract between ACEN and SLTEC to manage operational and reliability risks.
• ACEN utilized a template based on the Asian Development Bank's (ADB) energy transition mechanism 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} }