AC Energy to finalize funding for another overseas solar project

By Lenie Lectura – April 9, 2018
from Business Mirror

AC Energy Holdings Inc. targets to achieve financial close in the next month or two for another overseas solar-power project.

“There’s a time pressure there. Hopefully, in one to two months, we’ll be getting firm financial close for the project. The Vietnamese government gave a deadline of June 2019 for the solar plants to be operational for AC Energy to get the feed-in-tariff [FiT],” AC Energy President Eric Francia said when asked how soon the company can seal another solar-power deal with a new partner in Vietnam.

FiT is a form of incentive provided to developers of renewable energy, such as solar, wind, hydro and biomass. In Vietnam the government granted a 20-year FiT of 2,086 VND ($0.091) per kilowatt hour, which took effect on June 1, 2017, and will expire on June 30, 2019.

The power generated by all grid-connected PV installations will be sold to local power utility Electricity Vietnam. Solar-power producers will also be exempted from paying taxes on importing goods for their fixed assets.

In February Francia said the power firm was in talks with another potential partner for a possible solar-power venture in Vietnam. The identity of the partner has been kept private.

This new opportunity comes after the partnership of AC Energy and the Bim Group of Vietnam to jointly develop 330 megawatts (MW) of solar-power projects in Vietnam’s Ninh Thuan province.

AC Energy and BIM are starting with an initial phase of 30 MW, which broke ground on January 23, with Conergy Asia and ME as the construction partner. Investment for this phase is expected to reach 800 billion dong, or roughly P1.8 billion. It is expected to be completed within the year.

Francia said the agreement with BIM initially covers 330 MW, though “their landholdings there could support more than 1,000 MW.”

He said last year the company was eyeing Vietnam because “the population, the growth potential, the market size, supply-demand outlook is similar to what we have here in the Philippines.”

The move to develop renewable-energy projects overseas is in line with AC Energy’s plan to grow its presence in Southeast Asian markets. It has also partnered with UPC Renewables Indonesia Ltd. for a 75-MW wind farm under project company PT UPC Sidrap Bayu Energi.

AC Energy, he added, is confident it will successfully carry out another solar-power project in Vietnam given “our track record.”

“Our partners get comfortable with [our track record] in terms of doing these projects really fast. I think the Bronzeoak Philippines acquisition really beefed up, as well, our capability, that’s why we are confident we have the development capability, the experience between our own internal legacy, AC Energy, and Bronzeoak. We’re now operating as one and we are confident that in markets like Vietnam, we are able to move fast,” Francia said.

In March last year AC Energy acquired Bronzeak Clean Energy (BCE) and San Carlos Clean Energy (SCCE). The acquisition provided AC Energy with a development and operations platform of solar and biomass energy totaling more than 200 MW.

BCE and SCCE provide operations and management support services to a number of renewable-energy generation companies that include San Carlos Solar Energy, Negros Island Solar Energy, Monte Solar Energy, San Carlos BioPower, South Negros BioPower and North Negros BioPower.

Following the acquisition, BCE was renamed Visayas Renewables Corp., while SCCE has been renamed AC Energy DevCo.

AC Energy earlier announced plans to ramp up capacity target to 5,000 MW by 2025.

“Our goal is to exceed 5 gigawatts of capacity by 2025. We will do this by growing both in the Philippines and around the region,” Francia said, adding the goal would require over $2 billion in equity.

This year the company has set aside $300 million in capital expenditure. Bulk of this will be allocated for the construction of its Mindanao and Bataan plants.