Meralco's P16B Stake Acquisition Boosts Renewable Energy Drive

Manila Electric Co. (Meralco) is strategically fortifying its position in the power generation sector through the anticipated acquisition of a majority stake in SP New Energy Corp. (SPNEC) for a substantial P15.9 billion investment.

MGen Renewable Energy Inc. (MGreen), an arm of Meralco Powergen Corp. (MGen), is set to subscribe to 15.7 billion common shares and 19.4 billion redeemable preferred voting shares of SPNEC, effectively securing a controlling interest of 50.5 percent in the company.

SPNEC, a publicly listed solar power projects developer, is currently primarily owned by Solar Philippines Power Project Holdings Inc. (SPH).

The capital infusion from MGreen is specifically earmarked for the expansion and construction of SPNEC's solar projects, which will significantly contribute to the realization of the Department of Energy's renewable energy targets.

Meralco Chairman and CEO Manuel V. Pangilinan expressed the significance of this move in advancing the country's renewable energy agenda, highlighting the substantial contribution that this initiative would make to the nation's renewable energy capacity.

MGen, under the umbrella of Meralco, has set a robust target of achieving 1,500 MW of renewable energy capacity by 2030, emphasizing the commitment to driving sustainable energy solutions in the coming years.

Upon completion, this significant transaction is subject to regulatory approvals and certain precedent conditions.

Financial advice for the deal was provided by UBS, while legal advisory roles were handled by SyCip Salazar Hernandez and Gatmaitan and Gulapa Law for Meralco and MGreen. King & Spalding and Picazo Law provided legal guidance to SPH and SPNEC.

MGen and its subsidiary, Global Business Power Corp., are set to see a substantial expansion in their power generation portfolio, with a projected gross capacity of 2,470 MW by the end of the year. This capacity is anticipated to grow to 8,397 MW by 2027, with renewable energy comprising a significant portion of the overall mix.