The Government Service Insurance System (GSIS) has invested P2.2 billion in the Energy Transition Mechanism (ETM) initiative for the 244-megawatt power plant of South Luzon Thermal Energy Corp., enabling the Ayala group to fully divest from coal-fired assets.
The proceeds will allow the Ayala group’s power generation arm to transition into a fully renewable energy supplier.
In effect, GSIS’s investment will provide bridge financing to support ACEN’s transition to reach Net Zero greenhouse gas emissions by 2050, transition its generation portfolio to 100 percent renewable energy by 2025, and divest away from coal plants by 2040.
We will fully support investments that prioritize optimal environmental, social, and governance (ESG) factors or outcomes consistent with our corporate social responsibility,” said GSIS president and manager Arnulfo “Wick” Veloso said in a statement.
SLTEC’s ETM initiative is inspired by the Asian Development Bank’s own ETM, which is designed to help governments in the Philippine and Indonesia to transition their coal-fired assets through early decommissioning.
Veloso also said the move was intended to help strengthen the pension fund as well as support government initiatives to promote clean energy.
“(T)his investment will yield high dividends that will help us further strengthen our actuarial life, and provide opportunities to further diversify our funds,” Veloso said.
“Our priority is to find ways to grow and sustain our funds to ensure that we are able to provide our over 2.5 million members and pensioners their benefits when they fall due,” he added.
GSIS data show that with the optional retirement age currently set at 60 and the compulsory retirement age at 65, its social investment fund may last up to 2045.