SunScout and Alta Renewables plan 86-MWp Philippine solar-plus-storage projects

The projects span four sites with 20-year power supply agreements.

New Zealand-based SunScout Holding and Philippines-based Alta Renewables have reached an understanding to build, own, and operate (BOO) four solar-plus-storage projects totalling 87.5 megawatts-peak (MWp) in the Philippines.

Under the memorandum of understanding (MOU), SunScout plans to fund construction and retain ownership of the projects, which will operate under 20-year fixed-price power supply agreements.

The company expects to invest about $87.5m across the portfolio, based on an estimated $1m per MWp. The projects are expected to target at least a 10% project-level internal rate of return.

SunScout plans to use project-level financing of about 70% debt once each plant reaches commercial operation, allowing it to recycle most of its invested capital into new projects whilst retaining ownership.

The portfolio comprises a 25-MWp project for Aklan Electric Cooperative (AKELCO), a 12.5-MWp project for First Laguna Electric Cooperative (FLECO), a 25-MWp project for the Iloilo III Electric Cooperative (ILECO III) area, and a 25-MWp project for Zambales II Electric Cooperative (ZAMECO II).

The projects will pair solar generation with integrated renewable energy storage systems.

AKELCO has a fixed power supply rate of $0.097 (PHP6) per kilowatt-hour (kWh) under a 20-year agreement, whilst FLECO has a fixed rate of $0.078 (PHP4.85) per kWh.

ZAMECO II has a fixed rate of $0.094 (PHP5.79) per kWh, whilst ILECO III has indicative offtake terms of $0.093 (PHP5.75) or more per kWh.

Alta Renewables brought the projects to ready-to-build status by securing land rights, offtake terms, and permitting progress. It will remain involved as SunScout's Philippine co-development and operations and maintenance partner.

Alta Renewables will have the option to co-invest up to 33% of the equity in each project under the MOU.

SunScout also plans to compensate the developer at $100,000 per MWp for development work, with 80% payable when a project reaches ready-to-build status and 20% upon regulatory approval of its power supply agreement.

The companies are discussing more than 230 MWp of additional build-own-operate opportunities in the Philippines.

The pipeline includes about 25 MWp of additional capacity at ILECO III, a 25-MWp project with Capiz Electric Cooperative, and a 99-MWp project with Cagayan II Electric Cooperative.

“This is a BOO model at its best,” said Edwin Cywinski, Chairman and CEO of SunScout. “Alta Renewables gets these projects to shovel-ready, and we bring the capital to build them—then we own and operate them for the next 20 years under contracted, fixed-price agreements.”

John Michael Bernil of Alta Renewables said the partnership would allow SunScout to fund construction, whilst Alta Renewables remains an operating partner and equity co-investor.

The companies are targeting definitive project agreements on or about 24 August, with financial close on the first project planned for the fourth quarter.

The MOU remains subject to due diligence, internal and board approvals, and negotiation and execution of definitive agreements.

(US$1 = PHP61.81)