RCBC Participates in PHL’s First ETF Deal

ACEN’s management team led by President Fernando Zobel de Ayala, President and CEO Eric Francia, CFO Maria Corazon Dizon, SLTEC CEO Miguel de Jesus and President and CEO of SLTEC operating Miguel Angelo Fernandez are joined by RCBC Capital Corp. President and CEO. Jose Luis Gomez, Rhoda Huang, president of BPI Capital Corp., Eugene S. Acevedo, president and CEO of RCBC, and John-C Syquia, executive vice president and chief corporate banking officer of BPI.

The Rizal Commercial Banking Corp. (RCBC) participated in the first Energy Transition Financing (ETF) agreement in the Philippines for the early decommissioning of a coal-fired power plant while reinvesting funds in renewable energy.

This month, the RCBC Corporate Banking Group and RCBC Capital Corp. signed ETF financing agreements for South Luzon Thermal Energy Corp. (SLTEC) of AC Energy Corp. (ACEN), a subsidiary of Ayala Corp.

“In 2020, RCBC stopped funding new coal-fired power plants while redirecting resources to renewable energy projects, and our participation in this ETF agreement is part of that commitment,” said the Chairman and Chief Executive Officer. RCBC management, Eugene S. Acevedo.

As part of the ETF agreement, ACEN signed an Amended and Restated Omnibus Loan and Guarantee Agreement for SLTEC’s 2×135 megawatt (MW) power plant in Calaca, Batangas, with RCBC as one lenders.

In a regulatory filing, ACEN explained that the loan facility of up to 13.7 billion pesos is intended to refinance the outstanding amount of SLTEC’s 9.8 billion peso loan facility, finance the partial repayment of SLTEC’s capital held by ACEN and to finance other transactions related to the transaction. expenses. In turn, ACEN will use the proceeds from the share buyback to reinvest in renewable energy projects.

Thanks to this mechanism, the ACEN power station would be decommissioned by 2040, which is 15 years before the technical life of the plant.

ACEN explained that the concept of this agreement with RCBC and another bank adopts the principles of the Energy Transition Mechanism (ETM) piloted by the Asian Development Bank (ADB) in South and Southeast Asia.

The ETM aims to use public, private and philanthropic funding to provide low-cost capital to coal-fired power plants to accelerate their retirement and help jump-start reliable and affordable clean energy.

RCBC has been implementing its environmental and social management system since 2011 under the leadership of the International Finance Corporation (IFC). This collaboration has been going on for more than a decade now.

“With guidance from IFC, RCBC gained access to the Partnership for Carbon Financial Accounting (PCAF) and the 2 Degree Investment Initiative (2DII) for use of the methodology to assess the Paris Agreement Capital Transition (PACTA) 2DII’s PCAF and PACTA methodologies will enable RCBC to build a low-carbon, climate-resilient loan portfolio The recent ETF with ACEN complements this objective said Mr. Acevedo.

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