UK-based infrastructure private equity investor Actis has entered into a strategic partnership with Manila Electric Company (Meralco) and its subsidiary, Solar Philippines New Energy Corporation, to invest in the Terra Solar Project, aimed to provide electricity to around 2.4 million Philippine households.
This transaction is touted to be the largest foreign direct investment for a greenfield infrastructure project in the Philippines.
A report by Reuters said Actis is acquiring a 40% stake in Solar Philippines New Energy Corporation for $600 million.
“The scale of the Terra Solar Project and its capacity to provide clean power is enormous. It’s the single biggest such project in the world, visible from space,” said Lucy Heintz, Partner, Head of Energy Infrastructure at Actis, commented.
Morgan Stanley acted as financial advisor to Actis. Milbank and Sycip Law acted as international and domestic legal counsel to Actis.
The company statement indicates that around 5GW of solar and wind power purchase agreements (PPAs) have been awarded in recent years to support this transition. An additional two rounds of auctions of approximately 12 GW are expected to follow over the next year.
The project is located on the Philippines’ main island of Luzon, about 100 km from Manila and will combine 3.5 GWh of solar PV capacity with 4.5 GWh of battery energy storage system (BESS). The project covers around 3,500 hectares or the equivalent of 83,300 basketball courts and is backed by a 20-year, 850MW (for 12-hours daily on average) power supply agreement (PSA) with Meralco, the Philippines’ largest distribution utility.
The Philippines, which has an established energy sector has set the ambitious goal of increasing renewable energy generation to 35% of the country’s total by 2030.
“Terra Solar is one of the most ambitious renewables projects the world has ever seen. We are looking forward to contributing to the Government’s goal to have 35% of the country’s energy to come from renewable energy,” said Manuel. V. Pangilinan, Chairman and CEO of Manila Electric Company (MERALCO), parent company of MGEN.
