MGen Renewable Energy Inc. (MGreen) said Thursday it signed an agreement with SP New Energy Corp. (SPNEC) and its parent Solar Philippines Power Project Holdings Inc. (SPH) to develop the country’s biggest solar power project.
MGreen, the renewable energy unit of Meralco Powergen Corp. (MGen), a subsidiary of Manila Electric Co. (Meralco) and SPH agreed to use SPNEC as the primary vehicle to develop 3,500 megawatts of solar panels and 4,000 megawatt-hours of battery energy storage systems in Luzon.
“This will be one of the largest solar projects not just in Asia, but in the world,” said Meralco chairman and chief executive Manuel Pangilinan.
MGreen will invest P15.9 billion to subscribe to 15.7 billion common shares and 19.4 billion redeemable preferred voting shares in SPNEC.
SPNEC will file its application for an increase in authorized capital stock to enable the fresh injection of capital by MGreen to fund the construction and expansion of its solar projects.
MGreen’s common and preferred voting shares will make MGreen the controlling shareholder of SPNEC with a total voting interest of 50.5 percent.
SPNEC is an integrated developer, owner and operator of solar power projects listed in the Philippine Stock Exchange, which is currently majority-owned by SPH.
“The Department of Energy’s vision is to have about 35 percent of the country’s energy come from renewable energy, and this is one of Meralco’s major contributions to this goal. We are humbled and grateful for this opportunity to build this renewable energy platform with Meralco. We look forward to bring together Meralco’s capabilities and our solar developments for the benefit of all stakeholders,” said SPNEC chief executive Leandro Leviste.
The completion of the transaction is subject to the satisfaction of certain conditions precedent, including the relevant regulatory approvals.
UBS acted as financial advisor in the transaction. SyCip Salazar Hernandez and Gatmaitan and Gulapa Law acted as legal advisors to both Meralco and MGreen. King & Spalding and Picazo Law acted as legal advisors to SPH and SPNEC.