SPNEC buys out Terra Solar for P6B

Leviste-led SP New Energy Corp. or SPNEC has poured in P6 billion to fully acquire the shares of Prime Infrastructure Inc. in Terra Solar Philippines Inc. or TSPI to pave the way for the planned establishment of the world's largest solar farm.
SPNEC informed the stock exchange on Tuesday that it executed a Deed of Absolute Sale to buy out all the shares from Prime Infra.

The Philippine Stock Exchange lifted the suspension on the trading of SPNEC shares last 1 December 2023 after the firm reported that its public float has been raised to 20.02 percent to meet the minimum public ownership requirement of 20 percent.

The public now owns 6.88 billion SPNEC shares with non-public shares amounting to 27.49 billion shares.

Substantial shareholders are Leandro Leviste's Solar Philippines Power Project Holdings Inc. at 69.79 percent and Metro Pacific Investments Corp. at 4.65 percent.

SPNEC's public ownership fell below 20 percent after the approval of its increase in authorized capital stock from 10 billion to 50 billion shares, to support the expansion of its project portfolio.

TSPI was established in 2020 as a joint venture between Solar Philippines and Prime Infra to develop the world's largest solar and battery storage project, with a capacity of 3.5 gigawatt, or GW, solar and 4 GW-hour battery storage.
Upon completion, the project would surpass the size of India's Bhadla Solar Park and China's Golmud Solar Park, which are currently the world's largest solar farms at over 2.2 GW.

According to the latest figures provided by the Department of Energy, the amount of solar energy produced would exceed the capacity of all grid-connected projects, which is currently at over 1.5 GW.

SPNEC previously disclosed that it has secured over 3000 hectares of land for its projects, most of which have already been converted to industrial use.
SPNEC's developments are supported by the agreement signed between MGen Renewable Energy or MGreen, Solar Philippines and SPNEC on 12 October 2023 for a P15.9-billion investment.

Upon closing, MGreen will own 15.7 billion common shares and 19.4 billion preferred shares of SPNEC, translating to a total voting interest of 50.5 percent.

MGreen is the renewable energy development arm of Meralco Powergen Corp., a wholly-owned subsidiary of the Manila Electric Company or Meralco, the country's largest private-sector electric distribution utility company.

On the other hand, SPNEC is currently majority-owned by Solar Philippines. "This will be one of the largest solar projects not just in Asia, but in the world. The Department of Energy's vision is to have about 35 percent of the country's energy come from renewable energy, and this is one of Meralco's major contributions to this goal," Meralco chairperson and CEO Manuel V. Pangilinan said earlier.

The total investment for this project has been estimated to be "around P200 billion."

Supply deal sealed

Manila Electric Co. has signed a 20-year power supply agreement with TSPI for the supply of 850 megawatts, or MW, of renewable energy to cover the power distributor's mid-merit requirement starting 2026.

The PSA provides that a total of 600 MW of electricity will be available by 26 February 2026, while an additional 250 MW will be delivered starting a year after at a headline and levelized cost of electricity rate of P5.80 per kilowatt-hour, which was based on assumptions at the time when the competitive challenge for the unsolicited proposal was launched.

"The rate for this renewable energy supply offer is very competitive and lower than fossil-powered generation plants, especially at this time when fuel prices are skyrocketing. This PSA between Meralco and Terra Solar is very strategic as we ensure the availability of adequate and cost-competitive power for our more than 7.5 million customers in the coming years," said lawyer Jose Ronald V. Valles, Meralco FVP and head of regulatory management.