MANILA Electric Co. (Meralco) has decided not to seek additional partners for the P200-billion Terra Solar project after securing a $600-million (approximately P34 billion) investment from UK-based investment firm Actis, the company’s chairman said.
“It is 60:40 already; we don’t want to go below 60%, and they (Actis) are already at 40%,” Meralco Chairman and Chief Executive Officer Manuel V. Pangilinan told reporters on the sidelines of a signing ceremony on Friday last week.
SP New Energy Corp. (SPNEC), a unit of Meralco, has agreed to issue shares equivalent to 40% stake upon closing in Terra Solar, for a total consideration of about P34 billion from Actis.
“What truly makes Actis the right partner for us is the mutual respect and appreciation of the value that both of us will be bringing into the table,” said Emmanuel V. Rubio, president of SPNEC and Meralco PowerGen Corp. (MGen), during the ceremony.
“We both see Terra Solar not just as a project, but as a calling. A calling to lead the Philippines’ journey towards energy security and contribute to its economic prosperity,” he added.
Investment banking companies Morgan Stanley and UBS Asia-Pacific led Actis’ transaction for Terra Solar, according to Mr. Pangilinan, narrowing the “very long list of investors” keen on the project.
“We worked with two preeminent investment bankers… Happy to work with them. This is a super deal for Meralco and a super deal for the country,” he said.
The Terra Solar project in Nueva Ecija and Bulacan consists of a 3,500-megawatt solar power plant and a 4,000-megawatt-hour energy storage system. It is expected to generate more than five billion kilowatt-hours of electricity yearly.
The first phase of the project is scheduled to be delivered by 2026, while Phase 2 is targeted for 2027.
Mr. Pangilinan said that the Terra Solar project is “around 60-67% completed already.”
Established in 2020, Terra Solar was a 50-50 joint venture between Prime Infrastructure Capital, Inc. and Solar Philippines Power Project Holdings, Inc., the parent firm of SPNEC.
SPNEC took full control of Terra Solar after acquiring the entire stake of Prime Infra last year for P6 billion.
SPNEC is now controlled by the Pangilinan group, through MGen Renewable Energy, Inc., the renewable energy development arm of MGen, a wholly owned subsidiary of Meralco.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera
