SP New Energy Corporation Strengthens Solar Ambitions with Multi-Billion Peso Investments

SP New Energy Corporation (stock: SPNEC) is doubling down on its renewable energy ambitions with significant investments in two subsidiaries: Terra Solar Philippines, Inc. (TSPI) and Terra Nueva, Inc. (TNI). At its board meeting on October 9, 2024, SPNEC approved a massive Php8.93 billion in new subscriptions to boost the growth of these companies. This strategic move aligns with SPNEC's vision of developing the world’s largest solar power project, a critical part of the Philippines’ clean energy future.

1. Php6.03 Billion Investment in Terra Solar Philippines (TSPI): SPNEC has committed Php6.03 billion to TSPI, marking a significant step towards increasing the company's authorized capital stock. This will help accommodate an incoming investor, UK-based Actis Capital, which is slated to inject $600 million into TSPI for a 40% stake. The additional funding will go towards critical components such as engineering, procurement, and construction (EPC) contractors. This move strengthens TSPI’s ability to complete what is expected to become the world’s largest solar project.

2. Php2.9 Billion for Terra Nueva, Inc. (TNI): SPNEC has also allocated Php2.9 billion to Terra Nueva, primarily for land acquisition, right-of-way purchases, and land conversion costs. This subsidiary, formed in 2022, is primarily focused on securing the land required for the massive solar project and other investment ventures. Terra Nueva will also own the project site, which TSPI will lease, further securing the foundation for the solar facility's development.

The centerpiece of these investments is TSPI’s ambitious solar and energy storage project, which will include a 3,500-megawatt peak (MWp) solar power plant and a 4,500-megawatt-hour (MWh) battery energy storage system (BESS). Set to be located in Nueva Ecija and Bulacan, the project is a cornerstone of the Philippines' shift towards renewable energy.

Once completed, this solar project will generate over 5 billion kilowatt-hours of electricity annually, significantly reducing the country's reliance on fossil fuels. This is crucial as the Philippines pushes toward sustainable energy sources in response to both local energy demands and global climate challenges.

The Terra Solar project is divided into phases, with the first phase expected by 2026 and the second phase by 2027. The total cost of the project is estimated to be around Php200 billion, showcasing SPNEC’s significant commitment to revolutionizing the country’s energy landscape.

In addition to Actis' investment, SPNEC is also controlled by MGreen, a subsidiary of Meralco Powergen Corporation (MGen), the energy development arm of Meralco (stock: MER), which has a dominant presence in the country's power industry. This backing provides SPNEC with both the capital and industry expertise needed to realize its long-term vision.

One of the crucial elements for such a large-scale project is land availability. Terra Nueva’s role in acquiring and preparing the land for the solar and storage facilities is pivotal. Ensuring proper land use rights and conversions are in place will prevent costly delays and ensure that the project remains on track for its completion targets.

SPNEC’s collaboration with Actis Capital, a leading global investor in sustainable infrastructure, underscores the international appeal and importance of the Terra Solar project. Actis' $600 million equity investment will not only provide financial stability but also strengthen the project's global visibility, placing the Philippines at the forefront of renewable energy development in Southeast Asia.

SPNEC’s investments reflect broader trends in the global energy market, where renewable sources like solar are becoming increasingly vital. With its bold vision, SPNEC aims to play a leading role in the country’s clean energy transition, paving the way for a more sustainable future.