AYALA-LED AC Energy Corp. (ACEN) and its unit ACE Endevor, Inc. have agreed to lend P2.3 billion to an affiliate firm for the construction of a solar power plant and related facilities in Pampanga.

In a stock exchange disclosure on Thursday, the Ayala group said it signed the omnibus agreement with Greencore Power Solutions 3, Inc. and Citicore Solar Energy Corp. for the financing of a 30-megawatt (MW), alternating current, solar farm located in the province’s Arayat and Mexico towns.

The project is the second phase of a solar power plant project. ACEN also financed its first phase.

Greencore Power is the special purpose vehicle of the project and the borrower in the agreement. It is owned by Citicore Solar with 50% of the shares, while ACEN and ACE Endevor hold a 45% and 5% interest, respectively.

Under the agreement, ACEN as the lender will be extending a term loan facility to the borrower to finance the design, engineering, financing, construction, procurement and supply, manufacturing, commissioning, start-up, testing, delivery, ownership, operation and maintenance of the plant.

The loan will be secured by a real estate mortgage over the real assets of the borrower, a pledge over the shares of the borrower, and the cashflows of the project.

The plant is expected to be operational in February 2023.

The loan agreement is the latest development in the partnership between ACEN and the Citicore group.

In February 2020, Citicore Renewable Energy Corp. (CREC) and ACE Endevor entered into a “framework agreement” for the joint development, ownership and operation of solar and other power plants in the Philippines.

Citicore Solar is a wholly owned subsidiary of CREC.

Under the agreement, CREC and ACE Endevor are to be shareholders of Greencore, which was incorporated to own and undertake the development of the solar farm in Arayat and Mexico. It was planned to have an installed capacity of 50 MW-alternating current (72 MW-direct current).

In February 2021, ACEN and ACE Endevor signed a shareholders’ agreement with Citicore Solar and Greencore for the development, construction, and operation of the project, which started constructed last year.

In its website, ACEN placed the project’s estimated cost at P2.75 billion. It also said that the plant “will be ready to begin its operations and supply power to the grid by the summer of 2022.”

On Thursday, ACEN shares fell by 2.14% or 15 centavos to close at P6.85 each. — Victor V. Saulon