Japanese energy company (JERA) has entered into a share purchase agreement with Aboitiz Equity Ventures and Aboitiz & Company to purchase around 27% of the outstanding shares of Aboitiz Power Corporation (Aboitiz Power) for $1.58 billion.
The investment is to strengthen JERA’s position in the energy industry and help make a meaningful contribution in promoting clean and renewable energy in the Philippines. The company aims to reduce CO2 emissions from its domestic and international operations by 2050.
JERA has also signed a memorandum of understanding with Aboitiz Power to source and manage Liquefied Natural Gas (LNG) for potential LNG power plants that can augment intermittent renewable energy. JERA and Aboitiz Power are also looking to develop power projects, new generation technologies, and participation in plant operations and maintenance.
Aboitiz Power intends to expand its power generation capacity to 9.2 GW by 2030 and achieve a 50:50 clean energy and thermal capacity mix, to fulfill future electricity demand while promoting renewable energy in the Philippines. It is one of the largest power producers in the Philippines, with a well-balanced portfolio of assets spread across the nation.
The Philippines is experiencing a significant economic expansion, and energy demand is projected to grow at 4.2% annually until 2030, making electric power infrastructure development a top priority. The Philippines, like Japan, has limited energy resources and must rely on imports to meet its energy needs. JERA and Aboitiz Power are exploring possible opportunities to develop zero-emission thermal power generation technologies which can help reduce CO2 emissions in the Philippines.
The Philippines has set a renewables target of 35% in the overall power generation mix by 2030 and 50% by 2040.
In February this year, the Philippines issued policy guidelines for adopting energy-conserving building design and enhancing the demand for energy-efficient materials and technologies. Building owners can meet their total energy demands from these renewable energy power supply systems. They can sell the surplus renewable energy up to 100 kW to the local power utility.
JERA’s most significant clean energy investment in India is the $200 million in ReNew Power for a 10% stake. ReNew Power’s current stockholders include several marquee investors, including Goldman Sachs, CPP Investments, Abu Dhabi Investment Authority, and GEF SACEF.
According to Mercom Capital Group’s 1H and Q2 2021 Solar Funding and M&A Report, in 1H 2021, globally, VC funding in the solar sector was 680% higher, with $1.6 billion raised compared to the $210 million in the first half of 2020.