The Asian Development Bank, or ADB, approved a total of P6.6-billion fund for the solar energy projects by ACEN Corporation.
The bulk of the fund worth P5.5 billion is considered a loan, while the rest is a partial credit guarantee, according to the ADB report released last Tuesday. The total amount of the fund was approved on the same day.
"The sustainability-linked facility aims to boost the renewable energy capacity of the Philippines, which has traditionally relied on coal to meet its growing electricity needs," ADB said.
The Department of Energy aims to triple the country's renewable energy capacity to 15,304 megawatts by 2030, as the government projects the population to expand from 115 million to 125 million during that period.
Net zero by 2050
Meanwhile, Ayala-owned ACEN plans to ramp up its renewable capacity from 4,500 megawatts to 20 gigawatts within this decade. By 2050, ACEN said the company should achieve a net zero carbon emission.
To achieve these goals, ACEN has invested in acquiring facilities in Zamboanga and those in Australia, Vietnam, Indonesia and India.
ADB said ACEN's solar projects support the multinational lender's goal to increase its financing operations to 75 percent in the next seven years.
Under the terms of the solar financing, ADB said the fund will be released only after ACEN has complied with the lender's Environmental and Social Management System.
This requires ACEN to minimize environmental and social impacts of its project across the supply value chain by sharing construction updates and discouraging child labor and forced resettlement of households in the project sites.
ADB said ACEN committed to conduct consultations with all stakeholders of its solar projects and created mechanisms to resolve possible grievances.