‘Super deal’ with Actis shuts door on new Terra Solar investors

MANILA, Philippines — Business titan Manuel V. Pangilinan is closing the door to new investors for Terra Solar Philippines Inc. following a “super deal” with UK-based investment house Actis.

Pangilinan’s Manila Electric Co. (Meralco) sealed a $600-million (about P34 billion) investment with Actis last Friday, providing a major boost in the development of the world’s largest solar farm.

“For Terra Solar, this is the only partner. We don’t want to go below 60 percent, and they (Actis) are already at 40 percent,” he told reporters on the sidelines of the signing ceremony in Pasig City.

Under the deal, Meralco unit SP New Energy Corp. has agreed to issue shares equivalent to a 40-percent stake in Terra Solar.

This came several months after Pangilinan signified plans to bring in a foreign investor to provide a much-needed financial clout into Terra Solar.

According to the Meralco big boss, the deal was made possible by investment banks Morgan Stanley and UBS Asia Pacific, which helped narrow down the list from over 80 global investors vying for a stake in Terra Solar.

“We’re happy to work with them (investment banks). This is a super deal for Meralco and a super deal for the country,” he said.

This strategic partnership, claimed Actis, represents the largest foreign direct investment for a greenfield infrastructure project in the Philippines.

The project, strategically located in the provinces of Nueva Ecija and Bulacan, covers about 3,500 hectares of land, or equivalent to the size of around 83,300 basketball courts.

It will boast a total solar photovoltaic capacity of 3,500 megawatts peak with 4,000 MW-hours of battery energy storage system.

Pangilinan said the estimated project cost is now pegged at “about P213 billion or $4 billion,” which will be funded by a 75-percent loan and 25-percent equity from the Meralco Group and its partner Actis.

The project is targeted to be completed in phases: the first by 2026 and the second by 2027.

Although engineering, procurement and construction contractors have not been selected yet, Pangilinan said they have already tapped Fujian Engineering and Meralco Industrial Engineering Services Corp. to handle the connection facilities.

Once completed, the solar facility is expected to deliver 850 MW of mid-merit capacity to Meralco under a 20-year power supply agreement.

This will provide electricity to about 2.4 million households and reduce carbon emissions by approximately 3.6 million tons per year.