SMC power unit lists P40B bonds, vows to deliver an energy future that’s clean, affordable and reliable

SMC Global Power Holdings Corp. (SMCGP) successfully listed its P40-billion Fixed Rate Bonds on the Philippine Dealing and Exchange Corp. (PDEX), the largest corporate bond issuance to date, following strong demand from investors and confidence on its ability to continue providing reliable power nationwide while helping push the country towards a clean energy future. 

The bond offering, initially targeted to raise P30 billion, drew significant interest from investors, prompting the company to exercise its oversubscription option of up to P10 billion.  

It comprises the first tranche of SMCGP’s P60 billion shelf-registered peso retail bonds consisting of Series K Bonds, with an interest rate of 5.9077% per annum due in 2025; Series L Bonds, at 7.1051% p.a. due 2028, and Series M Bonds, at 8.0288% p.a. due 2032. 

“The funds provided by these Bonds come at an opportune time as we continue with our commitment to provide the country with reliable power supply, amidst present challenges in the global fuel market,” said SMC president and CEO Ramon S. Ang.  

“SMC Global Power fully supports the government’s thrust in powering the nation, as we continue to pursue business and expansion strategies that are aligned with our national and regional energy policies and needs - demonstrating our commitment to conduct business operations in a socially and environmentally responsible manner,” he added. 

Ang said that despite global fuel cost and supply woes brought on by the conflict between Russia and Ukraine, SMC’s power unit remains on track with plans to minimize the country’s dependence on coal, as part of the conglomerate's larger sustainability goals. 

“Right now we’re facing an unprecedented situation, but even as we work to maintain reliable and sufficient supply throughout this crisis, we are also very much focused on continuing our transition to cleaner and renewable fuel sources, without compromising on supply, quality, and affordability,” Ang said. 

Ang bared that SMC and its operating units are currently working on a Group-wide sustainability roadmap that will include major targets for its Power business to achieve a sustainable energy future. 

He added that as part of its transition strategy, SMCGP last month completed putting up 500 MWh of installed power storage capacity coming from new Battery Energy Storage System (BESS) facilities it is putting up nationwide — the largest initiative of its kind in South east Asia. 

By the end of this year, he said SMCGP expects to bring total battery capacity to 700 MWh, and by the end of 2023, 1,000 MWh, once all 32 BESS facilities come online. This is the very first and largest battery network in the Philippines by far.  

Ang said its BESS network will be key to ensuring reliable power supply nationwide, even in far-off areas. It is designed to minimize wastage by storing and redistributing excess capacity to ensure even underserved regions can have the same sufficient, reliable electricity enjoyed by larger cities. 

“With this, provinces and regions will have equal access to power, and therefore, an equal chance to attract investors,” Ang said. “Bringing electricity to power-challenged regions will help uplift the lives of more Filipinos, who will finally have access not just to basic electricity, but also opportunities and jobs brought about by electrification.”  

SMCGP’s BESS facilities, according to Ang, are also crucial to wider use of renewable energy in the country. “Currently, the main challenge of renewables is intermittence, or the unreliable nature of renewable sources such as wind, solar, and hydropower. Battery technology will enable renewable capacity to be stored, ready to be deployed even when solar or wind farms or hydropower plants are down,” he explained.  

SMCGP, which previously said it will no longer pursue new coal power investments, is also planning to increase capacities coming from cleaner fuel sources as well as renewables.  

It is also investing in new liquified natural gas (LNG) plants, utilized by developed countries as a cleaner “bridge” fuel that facilitates an exit from coal, and transition to renewables. It is also putting up additional solar and hydropower plants.  

Ang emphasized that even as the company and the country look to transition to cleaner power, the main challenge for the industry is still providing access to basic electricity for all, particularly reliable baseload capacity.  

“Today there is still some 16 million Filipinos who do not have access to electricity. Most are located in far-flung provinces, islands, or upland areas. Bringing power to them requires solutions that are affordable, reliable, and sustainable. Through our power business, we will continue to support all-inclusive growth and a resilient and sustainable future for the country and our economy,” he added.