Phinma to spend $2B on renewable energy expansion

Ayala-led Phinma Energy Corp. is looking at about $2 billion in capital expenditures in the next six years to expand the company’s renewable energy portfolio to 2,000 megawatts.

“Our vision for AC Energy Philippines is to be the leader in renewable energy in the country. Our goal is to reach 2,000 MW of renewables by 2025,” Phinma Energy president and CEO John Eric Francia said during the company’s annual stockholders’ meeting in Makati City on Tuesday.

Phinma Energy is to be renamed AC Energy Philippines as parent AC Energy is in the process of combining both companies’ assets and capabilities.

During a press conference on the sidelines of the stockholders’ meeting, Francia told reporters that the average cost of investment per megawatt of renewable energy is around $1 million or about $2 billion for the total 2,000-MW target.

“That’s our rough estimate until 2025,” he said.

The company will fund its renewable energy projects through a 70:30 debt-to-equity financing scheme.

“It’s roughly around $500 million to $600 million of equity that will be required to fund the 2,000 MW.  That’s over six years,” Francia said.

“The first batch of capital-raising will be through the SRO (stock rights offering). We’ll formally approve it on October 9 then to file with regulators soon thereafter so by late October and then our estimate is by three to six months for it to be approved,” he said.

The pricing for the SRO will be determined by market forces but the company will set an indicative target price.

“We will have fresh proceeds from SRO sometime first or second quarter next year,” Francia noted.

“That’s gonna be source of funding number one apart from the existing cash we have in our balance sheet and the cash flows that will be generated from these assets,” he added.

The stock rights offer is also seen to strengthen Phinma Energy’s balance sheet.

“We will have a very big equity base so we can now start borrowing from debt capital markets or bilateral bank loans to fund even more of our equity investments moving forward,” Francia said. —VDS GMA News