The Philippine Stock Exchange and the Securities and Exchange Commission approved the initial public offering of Solar Philippines Nueva Ecija Corp., the developer of a 500-megawatt solar project that could be the biggest of its kind in Southeast Asia.
SPNEC said in a statement over the weekend the IPO could raise up to P2.7 billion, with the first P1.3 billion raised primarily to complete the first 50 MW of the project, including the transmission line. The rest of the amount will be used to acquire land to expand the project beyond 500 MW.
“We thank the PSE and SEC for approving this IPO, which aims to give the public a new option to invest in RE and increase the RE capacity of the Philippines,” said Solar Philippines founder Leandro Leviste.
“We’ve decided to make this our group’s first venture into the public markets because this is the asset that we are proudest to showcase: a site where will rise the largest solar project in Southeast Asia, with potential for expansion given its proximity to Manila, to meet the growing demand for renewable energy in the Philippines,” Leviste said.
The offering will be held from Dec. 1 to 7, while the listing on the PSE main board would be on Dec 17, 2021, based on the listing notice posted on the PSE EDGE website.
The PSE gave the go signal for SPNEC to conduct an IPO for up to 2.7 billion shares at P1 apiece. The final offer price will be determined on Nov. 23 after the company completes its bookbuilding process.
The public will own 33.23 percent of SPNEC while Solar Philippines Power Project Holdings Inc. will own 66.77 percent once the IPO is completed.
“I am pleased that PSE can support a renewable energy company with its fund-raising requirements. The need for RE is more amplified now as more companies are turning to RE as part of their climate action program,” said PSE president and chief executive Ramon Monzon.
This is the first time that a company was approved to list under the supplemental listing and disclosure requirements for renewable energy companies approved by the PSE in 2011. These rules allow development-stage project companies to list, subject to certain requirements including having a valid and subsisting service contract awarded by the Department of Energy.
SPNEC secured a DOE service contract to develop the project in 2017. It plans to start the construction of the project before the end of 2021 with the first phase development eyed for completed by late 2022 so that cash flows from the business activity can start coming in to additionally fund the construction and development of the second phase.
The company said it might at a later date raise additional equity capital equivalent to 25 percent of the total project cost of phase 2 and/or utilize internally-generated cashflows and secure project financing to cover the balance.
SPNEC is in the early stages of discussions with various financial institutions regarding project financing for the construction of the second phase.
Once operational by end 2022, the first phase involving 225 MW of the project is intended to supplement Luzon grid’s thin reserves and help prevent the rotating outages that affected millions of Filipinos earlier this year.