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Solar Merchant Power Plant (SMPP) Financing Program

The Solar Merchant Power Plant (SMPP) Financing Program is designed to support the attainment of the government’s target of 35% renewable energy in the country’s energy mix by 2030 in accordance with the Philippine Energy Plan (2018-2030). The program is expected to contribute to the government’s goal of increasing solar photovoltaic capacity in the country from 2.16 Gigawatts (GW) in 2020 to 15.29 GW by 2030. This financing program caters to the solar project developers who intend to sell their electricity generated to the Wholesale Electricity Spot Market (WESM).

Eligible Borrowers
Private Corporations/Enterprises

Eligible Projects
Construction/Installation of solar merchant power plants

Eligible Loan Purpose

• Capital expenditures such as construction/expansion of infrastructure facilities, acquisition of machineries and equipment, and development costs in support of solar merchant power projects
• Reimbursement of eligible solar merchant power projects, provided the completed project is not more than one (1) year from date of actual project completion

Eligibility Criteria
Preferably, the proposed project assumptions should have the following parameters:

• Investment cost per MW- US$ 0.75 Million or lower
• Capacity Factor – 18% or better as per solar insulation data
• Annual Production Degradation – 0.5%
• Repayment Period – 12 years
• Interest Rate of 5% to 8%
• Debt Service Reserve Account (DSRA) of at least six (6) months

For project conditions outside of the above parameters, simulation using the Cost of Renewable Energy Spreadsheet Tool (CREST) Model should first be conducted before proceeding with the loan endorsement

Project Cost and Loanable Amount

The maximum loan amount shall be up to 60% (for Luzon projects) and 50% (for Visayas projects) of validated Total Project Cost

Loan Tenor
Up to twelve (12) years, with up to one (1) year grace period on principal

Interest Rate

• Interest rate shall be floating with 5% floor rate, based on DBP’s applicable benchmark rates plus applicable credit spread based on the borrower’s risk rating
• Principal and interest payable in quarterly amortizations

Other Conditions

• Additional Credit Enhancements

a. Strict implementation of upfront equity infusion
b. Project construction must be conducted through Engineering, Procurement, and Construction (EPC) Contract

• Authority to Debit Arrangement
• Continuing Assignment of Revenue Collection with Hold-out Provision equivalent to at least six (6) months throughout the term of the loan
• Submission of WESM Registration Certificate

Download Brochure

For more program information, please contact:

Program Development and Management I Department
Tel. Nos.: (02) 8818-9511 local 2316, 2340, 2348, 2379