ACEN Corp. said on Tuesday that its board approved the execution of an agreement with GNPower Dinginin Ltd. Co. for the supply of 43 megawatts (MW) of capacity.
In a regulatory filing, ACEN said that the power purchase and supply agreement will start on Oct. 26, 2022.
GNPower Dinginin owns a 1,336-MW coal-fired power plant in Mariveles, Bataan. It is a joint venture among Aboitiz Power Corp., Power Partners Ltd. Co., and AC Energy and Infrastructure Corp. (ACEIC).
ACEIC owns 62.43% of ACEN and has a 20% economic interest in GNPower Dinginin.
In a separate filing, ACEN said it executed option agreements with institutional investors for the early retirement of its subsidiary’s 246-MW coal-fired power plant.
The Ayala-led listed energy company said the option agreements are with investors ETM Philippines Holdings, Inc. (EPHI) and The Insular Life Assurance Co. Ltd. (InLife).
The agreements between ACEN and the investors entitle them to exercise call and put options, respectively, “based on certain pre-agreed conditions, in order to enable the early retirement of the coal plant by 2040, and its transition to a cleaner technology.”
On Monday, ACEN said its subsidiary South Luzon Thermal Energy Corp. (SLTEC), the owner and operator of the 246-MW power plant in Calaca, Batangas, redeemed 32 million preferred shares from ACEN for P3.2 billion.
ACEN said that as part of its overall energy transition mechanism (ETM) to enable more renewables, it executed separate option agreements with InLife and EPHI involving the coal plant “following the issuance of SLTEC shares to these investors.”
A holder of a call option has a right to buy a stock while a holder of a put option has a right to sell.
In October last year, ACEN’s board authorized its management to work on the early retirement of the SLTEC coal plant by 2040 through ETM.
ACEN described ETM as a mechanism developed by the Asian Development Bank that aims to “leverage low-cost and long-term funding geared towards early coal retirement and reinvestment of proceeds to enable renewable energy.”
The company said proceeds from the decommissioning of coal plants through ETM will allow it to reinvest funds into renewable energy projects.
In 2021, ACEN said it aims to reach net-zero greenhouse gas emissions by 2050 by retiring its remaining coal plants by 2040. It is also targeting to add more renewables to its portfolio by 2025.
On Tuesday, shares in the company closed 0.99% higher to finish at P6.15 apiece. — Ashley Erika O. Jose
