Accelerating the

ENERGY
Transition

Accelerating the

ENERGY
Transition

ENERGY

TRANSITION

MECHANISM

ACEN completes the world’s first market-based ETM transaction that will enable the early retirement of the 246-MW SLTEC coal plant by 2040 and its transition to a cleaner technology

The first
market-based
ETM in the world

246 MW

Net dependable
capacity

Unit 1 - Apr 2015
Unit 2 - Feb 2016

Start of Operations

Sub-critical Circulating
Fluidized Bed (CFB)

Calaca, Batangas, Philippines

South Luzon Thermal Energy Corporation (SLTEC)

First
market-based
ETM in the world

246 MW

Net dependable capacity

Unit 1 - April 2015
Unit 2 - February 2016

Start of Operations

Sub-critical Circulating
Fluidized Bed (CFB)

Calaca, Batangas,
Philippines

South Luzon Thermal Energy Corporation (SLTEC)

ETM is a key enabler

in accelerating the transition from fossil fuels to cleaner technology

ETM is a key enabler in accelerating the transition from fossil fuels to cleaner technology

The Asian Development Bank (ADB) promoted the ETM concept, which leverages public and private investments – from governments, multilateral banks, private sector investors, philanthropies, and long-term investors to retire coal assets on an earlier schedule than if they remained with their current owners.

ACEN decided to apply the ETM concept with the divestment of the 246 MW SLTEC coal power plant.

100% of the net proceeds to ACEN will be used for the company’s renewable energy investments.

Notwithstanding the divestment, the transaction was structured in such a way that ACEN can commit to a Just Energy Transition, which involves transitioning the coal plant to a clean technology by 2040, and ensuring an effective workforce evolution, community resilience, and collaboration with stakeholders.

ACEN decided to apply the ETM concept with the divestment of the 246 MW SLTEC coal power plant.

100% of the net proceeds to ACEN will be used for the company’s renewable energy investments.

Key Outcomes & Impact

₱17.4 billion

total transaction value, providing steady
returns to ETM investors

Up to

50 million MT CO₂

emissions avoided with early retirement

₱7.2 billion

proceeds to ACEN can enable
construction of the equivalent
of a 600 MW solar plant

Zero coal
ownership for ACEN

following the successful completion
of the ETM transaction

Completed November 2022

Key Outcomes & Impact

Capital structure & cost of capital are optimized

L-R) : Asian Development Bank director for infrastructure finance division Jackie Surtani, RCBC executive vice president of corporate banking Elizabeth Coronel, BPI senior vice president Barbara Ann Untalan, Government Service Insurance System president and general manager Jose Arnulfo “Wick” Veloso, ACEN president & CEO Eric Francia, Insular Life chairperson Nina Aguas and EPHI president Ronald Goseco.

Key Investors

Equity	₱3.7 Bn
Private investors have supported the deal in the first ever market-based ETM implementation
Debt	₱13.7 Bn
Energy transition loan classification has enabled banks to support the project by differentiating it from traditional coal financing.

Equity	₱3.7 Bn
Private investors have supported the deal in the first ever market-based ETM implementation

Philippine Government Service
Insurance System (GSIS)
₱2.2 Bn

The Insular Life
Assurance Company
₱1.0 Bn

ETM Philippines Holdings, Inc.
₱466 Mn

An SPV that allows financial investors to invest in energy transition to enable the accelerated retirement of coal-fired power plants, and to fund the development of new clean energy technologies