In recent years, the dream of a clean energy-reliant Philippines was an advocacy championed by a young businessman bravely venturing into solar power generation. He carried a good name and an even more commanding brandname, Solar Philippines.

And just like fairytales, it was a story many wanted to believe – that of an advocate becoming one of the country’s youngest self-made billionaires. But something always bugged me about it. Too good to be true.

You don’t just watch a guy with zero track record snaring energy deals left and right at the snap of a finger. For Leandro Leviste — whose mom happens to be a senator — the jackpot deals came easy. But his promise of solar salvation… well, that’s a different story. More like fiction.

Finally, the Department of Energy (DOE) has awakened from the dream, and what it did recently was a reality check: scrapping 33 renewable energy (RE) contracts of Solar Philippines. The DOE calls it part of a wider cleanup of 163 contracts that are delayed or fatally flawed.

Of the nearly 18,000 megawatts canceled in this clampdown by the DOE, a staggering 64 percent belonged to Leviste’s firm. That’s roughly 11,000 megawatts that existed mostly on the young legislator’s PowerPoint.

DOE Secretary Sharon Garin said they patiently waited, hoped, bent over backwards for these projects to roll out, but nothing happened. Now, DOE wants penalties dished out — very serious ones that possibly run up to P24 billion!

Congressman Leviste will have to learn a lesson Sen. Loren Legarda probably failed to get across to her dear son: you don’t give free prizes to kids with ambition. Clearly, you don’t hand out strategic energy futures to a neophyte who thinks he’s Superman. Yes, he may get the deal, he may win a term in Congress, but he’s got to deliver. For in energy, as in politics, delivery is everything.

No epal, please!

The late Sen. Miriam Defensor Santiago called them out long before it was fashionable. She even gave them a name — epal — and tried to outlaw the political pest who turns public service into a personal billboard. Her proposed anti-epal bill may not have passed, but the wisdom behind it just did.

She’s definitely who I remember when DSWD Secretary Rex Gatchalian put his foot down and ruled to bar politicians from hovering over “ayuda” distribution and payouts. The good secretary knows all this is backed by the 2026 national budget — from taxpayers’ money — so he draws a clear line that no faces, no names, no grandstanding could be allowed during AICS and similar handouts.

Elections are still two years away, yet some politicos already can’t resist mugging for cameras while the poor line up for help. It’s absurd. It’s shameless. And it’s precisely the behavior Miriam warned us about.

* * *SHORTBURSTS. For comments or reactions, email firingline@ymail.com or tweet @Side_View. Read current and past issues of this column at https://www.thephilbiznews.com

As Solar Philippines gears up for its IPO after getting a nod from both the Philippine Stock Exchange (PSE) and Securities and Exchange Commission, the recent AA+ from  Philippine Rating Services Corporation (PhilRatings) is proof that the business venture posits a Stable Outlook to Solar Philippines Tarlac Corporation’s (Solar Tarlac) with its proposed green bonds of up to Php 4.15 billion.

Solar Tarlac is a joint venture between Solar Philippines Power Project Holdings, Inc. (Solar Philippines) and tycoon Enrique Razon’s Prime Metro Power Holdings Corporation (Prime Power). In 2020, the two companies entered into a strategic partnership to develop the country’s largest portfolio of solar projects.

Proceeds of the bonds would be used to refinance a Php 2.225 billion loan used for the construction of Solar Tarlac’s now operating 100 MW solar plant in Concepcion, Tarlac, and to fund the expansion of the plant to 150 MW.

“Obligations rated PRS Aa are of high quality and are subject to very low credit risk. The obligor’s capacity to meet its financial commitments on the obligation is very strong. A plus (+) or minus (-) sign may be used to further qualify a rating,” PhilRatings said.

“On the other hand, an Outlook is an indication as to the possible direction of any rating change within a one year period and serves as a further refinement to the assigned credit rating for the guidance of investors, regulators, and the general public. A Stable Outlook is defined as: “The rating is likely to be maintained or to remain unchanged in the next 12 months,” PhilRatings added.

“PhilRatings considered the following key rating factors in the assignment of the rating and Outlook: a) significant market position in the solar energy industry of the Project Sponsors, albeit with a relatively short track record; b) very manageable construction risk; c) asset and customer concentration risk; d) market risk mitigated with a 20-year Take-or-Pay Power Purchase Agreement with Manila Electric Company (Meralco) and established solar irradiation data; e) general economic uncertainty due to the pandemic, but with opportunities which will benefit the company,” PhilRatings noted.

Solar Tarlac’s supply agreement with Meralco covers almost all of the power expected to be generated by the plant. Meralco is the country’s largest distribution utility, with a solid financial and liquidity position. It has an outstanding issue credit rating of PRS Aaa, with a Stable Outlook, from PhilRatings for its outstanding Php 7.0 billion bonds due in 2025.

The sister company of Solar Tarlac is Solar Philippines Nueva Ecija Corporation (SPNEC), the developer of a 500 MW solar project that is planned to be the largest solar project in Southeast Asia.

SPNEC could raise up to Php 2.7 billion, with the first Php 1.3 billion raised primarily to be used to complete the first 50 MW of the project, and amounts raised in excess of Php 1.3 billion primarily to be used to acquire land to expand the project beyond 500 MW.

SPNEC’s offer period is planned for December 1 to 7, 2021, with a tentative listing date on the Main Board of the PSE on December 17, 2021, based on the Listing Notice posted on the PSE EDGE website.

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