Fernando Zobel de Ayala
Annual Stockholders’ Meeting | 25 April 2022
Esteemed shareholders, my colleagues on the Board of Directors and the different management teams across ACEN, ladies and gentlemen, good morning to all of you.
Amidst the challenges brought about by the pandemic and the recovery of the economy, ACEN continued to mount activities that provided livelihood assistance to affected communities.
Through the Brigadang Ayala Kaakay progam, ACEN participated in a 12-week food distribution program for 10,000 vulnerable families across Metro Manila, particularly those who lost their livelihood because of the pandemic.
After the onslaught of typhoon Odette in the Visayas and Mindanao, ACEN also joined the Ayala group in a series of relief assistance programs and formed a dedicated crisis management team on the ground that mobilized teams to distribute relief goods, medical supplies, cash donations and other emergency needs. ACEN distributed 3,000 relief packs to our host communities close to the company’s solar power plant in Bais, Negros Occidental.
ACEN is committed to the welfare of its host communities and we understand the need to go above and beyond our primary role as an energy provider.
Allow me to begin today’s stockholder’s meeting with some significant developments in our business. I am delighted to report that ACEN now has 3,800 MW of attributable capacity both in the Philippines and internationally. 3,300 MW of this figure is from renewable sources such as solar, wind, and geothermal energy.
We achieved this notable milestone in the midst of ACEN’s continuing energy transformation journey, which began in 2019. Last year was a noteworthy period, as we added 1,200 MW of renewable attributable capacity. The company also increased its project pipeline to 18,000 MW, putting it in a position to aggressively expand its renewable investments.
We are confident that the integration of our Philippines and international platform in 2021, puts ACEN in a strong position to realize our aspiration of becoming the largest renewables platform in Southeast Asia. To recall, we are aiming for an ambitious goal of reaching 5,000 megawatts by 2025 – a remarkable figure, considering that we were coming from just 250 MW of renewables capacity four years ago.
As we continue on this journey, we note that the Philippines remains our core market, accounting for 40% of our capacity, with the other 60 percent coming from international markets which include Indonesia, Vietnam, India and Australia. We remain bullish with ACEN’s renewables growth strategy, and believe that there will be sustained growth in renewable energy demand, as the world accelerates its transition to cleaner sources of power.
Achieving our 5,000 MW target requires strength and stamina, and we believe that ACEN has the necessary resources to achieve this bold ambition. We have embarked on several notable initiatives to further strengthen our balance sheet and augment our cash position.
ACEN successfully raised around 48 billion pesos in 2021. In January 2021, the company completed its stock rights offering that raised ₱5.4 billion from the issuance of 2.27 billion primary shares. This was followed by the successful completion of a private placement of 4 billion primary shares worth ₱11.9 billion to GIC, Singapore’s sovereign wealth fund. The company’s follow-on-offering last May contributed another 10.3 billion pesos.
ACEN also successfully completed a $400 million Fix-For-Life or FFL Green Bond offering that listed in the Singapore Exchange or SGX last September. The fresh capital will enable the company’s aggressive growth plans.
Building on all of these, and as a sign of the market’s strong support and confidence in the company, we are also delighted that ACEN was included in both the PSEi and the MSCI last November.
Our strong balance sheet, complemented by a robust pipeline of renewable projects and a highly capable and motivated team, places ACEN in an excellent position to play a meaningful role in the ongoing energy transition. We have earmarked ₱55 billion pesos for our renewable energy expansion, which our President Eric Francia will elaborate on in his report.
We have referenced multiple times the ongoing energy transition, and ACEN’s leading role in this important movement. ACEN is proud to be a significant component of the Ayala Group’s commitment to achieve Net Zero Greenhouse Gas Emissions by 2050 or earlier, which we announced last November.
This commitment aligns ACEN and our sister companies across the Ayala Group with the global campaign for climate action. This is our pledge to all generations to help secure the future from the threats brought by climate change and create a solid platform for equitable and sustainable growth.
As its commitment to this Group-wide initiative, ACEN, will transition its generation portfolio to 100 percent renewables by 2025. Significantly, ACEN is also working towards an early retirement of the SLTEC coal plant by 2040, 15 years earlier than its technical life. Towards this goal, we will adopt the Just Energy Transition principles on the transformation to cleaner energy, and develop programs for a successful transition of our employees and the communities that SLTEC serves.
Let me emphasize once again that sustainability will always remain at the core of ACEN . Even as the company is still a young and growing institution, we are proud to be at the forefront of the energy transition here in the Philippines and the Asia Pacific. We continue to explore several other initiatives that will help in accelerating the pace of change, including new innovations at the intersection of clean energy, technology, and meaningfully disruptive business models. We look forward to working closely with our peers, partners, and stakeholders in this worthwhile effort.
On behalf of the Board of Directors, the management, and our entire team, I extend our most sincere appreciation to our shareholders and our many stakeholders for your continued trust and support.
Allow me to also recognize a new member of the ACEN Board. Joining our Board of Directors will be Mr. Dean Travers. Dean is an accomplished senior executive, business developer and strategic advisor, with 25 years of relevant experience and broad knowledge in the energy industry. His expertise cuts across global markets, covering market mechanisms, policy and regulations, and conventional and renewable electricity generation technologies. Welcome Dean. We are delighted to have you onboard, and we certainly look forward to exchanging thoughts and insights with you. I would also like to thank Mr. JP Orbeta for having served in the ACEN Board since 2019. Mr. Orbeta has recently taken on an important executive role as the company’s Chief Administrative Officer.
Before I close, allow me to just say a few words about the last two years. Certainly, our lives have been disrupted in unimaginable ways because of the COVID-19 pandemic. It was definitely a difficult period for many of us, having to balance keeping our businesses and operations afloat, while keeping ourselves and our loved ones safe, and while managing our own emotions in the midst of great uncertainty. More recently, we recognized that the conflict in Europe has likewise disrupted the energy sector and has had a cascading effect on the prices of good and services.
As we steadily start to heal from the collective trauma that we have experienced as individuals and institutions, it continues to bring me much hope that game changing vaccines and medicines, coupled with a strong spirit of partnership between the public and private sector has resulted in the easing of mobility restrictions. We are seeing increased dynamism and energy in our community spaces and within our people. In the midst of great uncertainty, these signs inspire within me and in the many men and women of ACEN a strong spirit of hopefulness that a much brighter future is not that too far in the horizon.
Once again, I thank the entire ACEN organization and its management team both for the strong performance delivered in 2021, but also the significant progress made towards our 2025 goal. I thank you for your commitment and energy despite the many challenges. While we still have quite a journey ahead towards our full recovery, we remain encouraged that the solid platform that we have built will continue to spur our growth as a company, while contributing to the progress of the country.
Thank you very much and I now turn you over to Eric Francia for his President’s Report.