Billionaire Enrique Razon Jr.’s Prime Infrastructure Holdings Inc. and its partner will invest P200 billion in Terra Solar Philippines, top executives said Thursday.
Terra Solar, a unit of Terra Renewables Holdings Inc., signed a 20-year power supply agreement to deliver 850 megawatts of renewable energy to cover Manila Electric Co.’s mid-merit requirement starting 2026.
“The plant is today one of the largest contracted solar plus storage plant in the world. Prime Infra, together with its partner, will invest some P200 billion into developing Terra Solar,” Terra Renewables president and chief executive Guillaume Lucci said.
Lucci did not identify Prime Infra’s partner but Prime Infra earlier signed a partnership agreement with Solar Philippines Power Project Holdings Inc.
“It is a step change in the way power generation is approached. As a company pursuing economically critical and socially relevant infrastructure, Prime Infra is committed to do its part in accelerating the clean energy transition and strengthening the country’s energy security,” Lucci said.
Under the PSA, Terra Solar will supply 600 MW to Meralco by Feb. 26, 2026, and an additional 250 MW starting Feb. 26, 2027.
Terra Solar will supply RE to Meralco at a headline and levelized cost of electricity rate of P5.80 per kilowatt-hour, which was based on assumptions at the time when the competitive challenge for the unsolicited proposal was launched.
“The rate for this renewable energy supply offer is very competitive and lower than fossil-powered generation plants, especially at this time when fuel prices are skyrocketing. This PSA between Meralco and Terra Solar is very strategic as we ensure availability of adequate and cost-competitive power for our more than 7.5 million customers in the coming years,” said Meralco first vice president and head of regulatory management lawyer Jose Ronald Valles.
Valles said the PSA was part of Meralco’s compliance with the Department of Energy’s renewable portfolio standards policy and solidified its commitment to source up to 1,500 MW of power requirements from RE.
Terra Solar’s 850-MW mid-merit supply can power 1.55 million houses annually at an average of 200 kilowatt-hours per month, while displacing an annual consumption of 1.4 million tons of coal or 930 million liters of oil.
The project combines a 2,500-MW to 3,500-MW solar photovoltaic system and about 4,000 megawatt-hours to 4,500 MWh of energy storage.
“This contract with Meralco is our response to help meet the increasing demand for power through a more cost-efficient and sustainable manner. We applaud Meralco for its drive to decarbonize the energy industry and ensure reliable quality power supply to support its customers,” Razon said.
Razon said meeting the country’s power supply is of paramount importance to sustain economic growth, particularly in the wake of challenges faced through the pandemic and global economic headwinds.
“Terra Renewables’ further investments in renewable energy infrastructure also aims to help bring down cost of power while creating long-term economic, environmental, and social values,” he said.
Lucci said the solar PV-plus-storage project would contribute significantly to the share of RE in the power generation mix.
“We are on track in the project development stage and target to provide stable mid-merit power supply to Meralco starting 2026,” said Lucci.
Terra Solar’s sites can bank excess energy when electricity is produced and supply it back to the grid when necessary, providing stable power to customers and communities.
Terra Solar is the first to offer the combination of solar PV and energy storage on such a large scale in the Philippines, shifting the nature of a solar plant from peaking to mid-merit capacity.
The parties will file the PSA with the Energy Regulatory Commission and will be subject to regulatory proceedings and approval before implementation.
The signing of the PSA serves as the culmination of the competitive challenge for Terra Solar’s unsolicited proposal.
Razon signed the PSA on behalf of Prime Infra, while Lucci acted as witness.
