ACEN spending up to P70 B this year as earnings grow

ACEN Corp. is preparing to spend P50 billion to P70 billion in capital expenditures this year to continue growing its renewable energy portfolio.

The company spent P50.6 billion in capex last year to accelerate its renewables expansion, commencing construction of over 1,300 megawatts (MW) of new solar and wind farms in the Philippines, Australia, and India.

ACEN, the listed energy platform of the Ayala Group, currently has more than 2,400 MW of projects under construction which will help bring the company closer to its ambition of achieving 20 gigawatts (GW) in renewable energy capacity by 2030.

“With 700 MW in new capacity expected to come online in the Philippines by the end of the year, and another 521 MW of new capacity commencing operations in Australia, we expect to move into a net selling merchant position and be on a stronger footing in 2023,” ACEN president and CEO Eric Francia said.

Driven by strong revenues, ACEN’s net income reached P14.60 billion in 2022, up 90 percent from the previous year’s P7.67 billion.

Net income attributable to equity holders of the parent company surged by 148 percent to P13.1 billion from P5.3 billion in 2021.

ACEN said this included P8.6 billion of net impact in revaluation gains resulting from the company’s full acquisition of the Australia platform, as well as provisions for a Supreme Court decision voiding the Philippine Electricity Market Corp.’s administered/regulated pricing regime and for the Lac Hoa & Hoa Dong wind project in Vietnam.

Revenues of the company expanded by 35 percent to P35.2 billion, driven primarily by fullyear contributions from new Philippine merchant plants.

“In 2022, the Philippine power sector weathered significant challenges caused by our country’s continued dependence on high-priced coal and unserved power demand, and as a result, we felt the impact of the high cost of power,” Francia said.

ACEN currently has around 4,000 MW of attributable renewables capacity in operation and under construction across the Philippines and the region.

The company completed last year the world’s first market-based energy transition mechanism (ETM) for the 246-MW South Luzon Thermal Energy Corp. (SLTEC) coal plant, raising P7.2 billion from the full divestment of SLTEC, which ACEN can use to fund its renewables expansion.

It also issued in 2022 its maiden peso green bonds worth P10 billion, due in 2027, which were oversubscribed by 8.6 times as a result of robust demand.

ACEN Australia, for its part, signed green loans from several international banks, as well as the Australian government’s Clean Energy Finance Corp. to fund its expansion.

“Adhering to green financing principles, we continue to diversify our funding options, providing a strong foundation for our ambitious 2030 target to achieve 20 GW in renewables capacity,” ACEN CFO and treasurer Cora Dizon said.

“The success of our recent funding initiatives shows that the capital markets and financial sector continue to regard ACEN as a leader in innovative and sustainable instruments, such as the ETM, Green Bonds, and Green Loans,” Dizon said.

ACEN aims to be the largest listed renewables platform in Southeast Asia, with a goal of reaching 20 GW of renewables capacity by 2030.

The company plans to transition its generation portfolio to 100 percent renewable energy by 2025 and to become a net zero greenhouse gas emissions company by 2050.