Acen could raise around US$1bn in debt over the next 12 months or so as the energy unit of Philippine conglomerate Ayala develops its pipeline of renewable power projects in Asia Pacific.
The Philippines is Acen’s home market and its largest, accounting for 2.4GW or 34% of its 6.9GW of attributable renewable capacity at the end of March, followed by India, Australia, Vietnam/Laos, Indonesia and the US.
Of Acen’s renewables portfolio spanning geothermal, hydro, solar and wind, some 2.6GW, or around 37%, is being built and 823MW, or 12%, is from committed projects that have been approved but have not yet received notice to proceed with construction.
“The three countries that will see the most activity are the Philippines, Australia and India,” said Jonathan Back, the company’s chief financial and strategy officer, in an interview. “We've got significant pipelines in all three countries that would have projects come to financial close between now and the end of 2027.”
Projects at an earlier stage in the pipeline include over 7GW in Australia, over 1GW in India via partnerships with BrightNight and UPC Renewables, and an offshore wind farm in the Philippines in collaboration with Danish renewables giant Copenhagen Infrastructure Partners.
One of its largest projects is the Quezon North Wind complex in the central-eastern Philippines, for which Acen is spending almost US$1.5bn-equivalent in total for the first two phases of 553MW combined.
Two-thirds of that amount will come through project financing with the company having already signed a Ps34.4bn (US$602m) green loan in March to build the 345MW first phase. Bank of the Philippine Islands, BDO Unibank and Rizal Commercial Banking Corp were the lenders on the 15-year PF.
The first phase has a 20-year power purchase agreement under the Philippine government’s green energy auction programme and is targeting completion in the last quarter of 2026.
The second phase of 208MW is expected to move to financing and construction soon to meet a targeted completion date in late 2027.
“In 2026 in the Philippines, we’d be looking at north of half a billion dollars in terms of project financing activity and it could comfortably be twice that if some of the other large projects get to construction,” Back said.
In May, Acen agreed to buy a 25% stake in the San Miguel Bay offshore wind project in Camarines Sur from Denmark’s CIP. The project is in its pre-development stage and has a potential installed capacity of up to 1GW.
The project could be one of the country’s first offshore wind farms built under the government’s fifth round of the green energy auction that was launched in June.
The department of energy plans to procure 3.3GW of capacity using fixed-bottom offshore wind technology, with operations to start between 2028 and 2030. At least 16 offshore wind projects with a projected combined capacity of 16.6GW may compete when bids are submitted later this year.
The San Miguel Bay offshore wind project costs are still being refined, but most of the financing is likely to be in pesos, Back said.
Last September CIP told local media that the 1GW project could require an investment of around US$3bn.
This year financing for some assets in the Philippines could be moved to the project level once they have started commercial operations and begun delivering stable earnings.
Solar plans
In India, financings are in the works for the 420MW Tejorupa solar farm in Rajasthan and the 120MW Bijapur wind farm in Karnataka that are being built in partnership with UPC Renewables.
The projects are expected to carry about 60%–70% debt, which will be funded at the project level with financing becoming non-recourse once they have begun operating.
“The focus for us primarily is now on project finance in the functional currency of the project,” Back said. “Ideally that’s non-recourse, but there's a sliding scale so to speak where you go from true non-recourse through to PF that is guaranteed by Acen or maybe temporarily guaranteed during the construction phase.”
In 2022, Acen-UPC obtained a 20-year project level loan of around Rs12.5bn (US$145m) from State Bank of India to fund the 420MW Masaya solar farm in the state of Madhya Pradesh.
The project was estimated to cost US$220m and sells electricity under a 25-year agreement with Solar Energy Corporation of India. Acen provided an undertaking-cum-guarantee for the entire debt.
The solar and wind projects of 540MW combined that Acen-UPC is developing in India form part of a pipeline of more than 1GW in the country, which the developers aim to complete over the next two years.
In Australia, Acen had 150MW of committed projects at the end of March that are expected to start construction.
In April, Acen Australia completed a portfolio debt refinancing of A$750m (US$472m) to fund the completion of the 520MW Stubbo Solar project as well as a pipeline that spans over 7GW of solar, wind, battery energy storage systems and pumped hydro projects across the country.
ANZ, Cathay United Bank, Commonwealth Bank of Australia, CTBC Bank, DBS Bank, Deutsche Bank, HSBC, MUFG, SMBC, Westpac and United Overseas Bank were the lenders of the green loan.