Innovation

Alternergy resulted from a 2006 business case study on “Investing in Renewable Energy in Emerging Countries,” authored by Mr. Vicente “Vince” S. Perez, Jr., a Yale World Fellow. Perez, a passionate environmentalist, and former investment banker, served as a secretary of the Philippines’ Department of Energy from 2001 to 2005, promoted local sources of energy, boosted energy self-sufficiency, and crafted an ambitious policy framework on renewable energy with goals to make the Philippines become Southeast Asia’s wind powerhouse given its geographical location exposed to monsoon winds.

Perez kept these goals in mind, and with his passion for making the study put into a reality, Perez, together with other co-founders Knud Hedeager and Gerry Magbanua, came together to create Alternergy - to break new ground on more renewable power projects. After battling many hurdles to raise capital from potential investors, the founders pivoted away from its ambitious plan of developing a pan-Asian portfolio. Instead, they decided to focus on the Philippines, seeing great potential for wind power. Alternergy went through enormous challenges during the early years of operations while building up project pipelines and until they partnered with foreign investors. Perez recalls during the negotiation of the investment agreement, “We struggled a lot, others could have folded, others could have fought, and argued and split, but despite one person resigning, we were still together,” he said.

Alternergy pioneered wind resource assessment studies in potential sites in the Philippines. Wind power was considered a new technology then, and the company’s early engagement in activities created an avenue to educate local government agencies on creating an efficient permitting process that other renewable energy companies would soon use.

As the company navigated its challenging financing journey, Alternergy pioneered a unique financing strategy that is the first in the Philippines—a syndicated non-recourse project financing for wind and solar projects with the Phillippine local banks. “This is pioneering because we were given a loan without a corporate guarantee from a large corporate parent but only due to the credit strength of the projects- our Pililla wind farm and Kirahon solar farm. Our syndicated loan for the Pilillia wind farm received a Sustainable Finance Award from the Internationa Finance Corporation,” Perez says.

Solar, Wind, and Hydro Power for a Greener World

Inspiration

In 2005, after a successful stint at the Department of Energy, Perez faced a crossroads. Unsure of what to do next, he consulted his Singaporean personal coach, who helped him go through self-values and psychometric tests to help make a decision. “He felt that my love for the environment, plus my four years as Energy Secretary, shouldn’t be wasted and that, given my entrepreneurial background and experience with banking details, I should set up my own business in the nexus of energy and environment which is renewable energy,” Perez says.

Passionate about the environment and guided by vision and determination to create a profitable business with a meaningful impact, the three Alternergy founders, Vince, Knud, and Gerry founded Alternergy in 2008. Alternergy is a name coined from "alternative energy," reflecting the company’s mission to alter the Philippine landscape as a pioneer in renewable power.

Alternergy is committed to creating a sustainable future for the next generation. In 2022, it confirmed its commitment to being a pure renewable energy company exclusively focused on renewable energy sources. This approach means that the company will not invest in fossil fuel generation, such as coal, oil, natural gas, or nuclear power, which all have negative environmental impacts.

Perez and his co-founders were also inspired when a solar company became publicly listed on the Philippine Stock Exchange in December 2021. They felt that Alternergy has a credible, solid track record in renewable energy and that going public would help them raise long-term capital permanently to fund more renewable energy projects. It was a timely consideration as when the Russian-Ukraine war broke out in February 2022, it resulted in an energy crunch, and countries worldwide began looking for alternatives to fuel fuels. “Oil and coal prices rose, making renewable energy a compelling investment for the public,” Perez says.

Alternergy made its first initial public offering (IPO) in March 2023.

Overall impact

Alternergy, as an emerging renewable energy player, is contributing significantly to shaping the renewable energy landscape of the Philippines. Its diverse portfolio of wind, solar, run-of-river hydro projects, off-shore winds, and battery storage provides a clean and affordable energy supply to its host communities and creates precedents for responsible energy solutions that will result in a sustainable future for the next generation.

In developing more RE projects to produce clean energy, Alternergy creates a cycle that contributes to economic growth and primarily benefits the host communities. Poverty is reduced as residents and indigenous people are given job opportunities and access to reasonable and dependable electricity supplies, education, and healthcare, leading to improved quality of life. Similarly, seeking partnerships with various stakeholders, from community hosts, government agencies, financial institutions, corporations, and local utilities, promotes positive collaboration that helps tap the potential for innovative business approaches that lead to societal and economic growth. The efficient permitting process and unique financing strategy they worked on positively influenced the perspective of the financing institutions and government agencies toward a collaborative approach to developing the country’s renewable energy resources.

As Alternergy leverages natural resources to create a business that is good for the future, it also raises awareness and consciousness among people about how our present actions could impact the future of future generations. The efficient, optimal, and responsible utilization of natural resources such as wind, rivers, and solar to create clean energy crucial to a country's development reflects values various stakeholders can replicate. Business owners and leaders can understand that nation-building activities can meet human needs without compromising the ecosystem or depleting the resources.

The company plans to develop more projects as part of its three-year expansion plan to generate an additional RE capacity. With these project pipelines, Alternergy is poised to reduce carbon emissions while creating economic value for stakeholders, improving the quality of people's lives, and significantly accelerating the country's efficient transition to renewable energy pioneer addressing challenges of climate change, energy security, and access to clean energy.

Business benefit

Alternergy, a renewable power pioneer, is now known for its profitability and clean energy vision. As a company that promotes sustainability, its innovation of a Triple-Play portfolio—the wind, solar, and run-of-river hydro projects, including the Palao solar farm and battery storage, brings diverse and stable sources of revenue for the company. From its operations in 2008, Alternergy has grown its assets to 11 operating assets equivalent to 86 megawatts, three projects under construction equivalent to 50 megawatts, and 4 projects in the pre-development stage with an estimated capacity of 338 megawatts. Alternergy expects to produce a total of 474 megawatts in the next three years, and this target sets Alternergy to become a leading renewable energy company in the country, providing community hosts access to clean and affordable electricity.

With the infusion of fresh funds as a publicly listed company, Altenergy continues to achieve a remarkable financial feat in the renewable sector. Their economic value has increased significantly, benefitting the overall economy and other stakeholders such as suppliers, contractors, employees, consumers, host communities, government regulators, and loan providers.

Social and environmental benefit

True to its mission to develop power projects nationwide using renewable energy resources, Alternergy threads the path to a sustainable future and commits to socio-economic advancement through its business practices, prioritizing social and environmental responsibility.

Guided by its Quadruple Bottom-Line Philosophy—Profitability, Carbon Reduction, Community Benefits, and Employee Fulfillment—Alternergy collectively contributes to all 17 UN Sustainability Development Goals by providing clean and affordable energy to the local community while reducing greenhouse gas emissions.

Its portfolio of assets from wind and solar farms in operation avoids 125,648 tons of carbon dioxide emissions yearly that fossil fuel generation would have otherwise produced. At the same time, the electricity generated from renewable sources provides clean electricity to 280,561 households. In the upland areas where the run-of-river hydropower projects are located, about 54,293 trees have been planted as of June 2022 to replace the vegetation affected during the construction. Alternergy also conducts the best practice wildlife and ecological assessment before it starts any project to ensure that what it develops is in harmony with the environment.

At the community level, Alternergy provides its 41 host communities with financial support for impact-driven initiatives on livelihood. The company hires locals during construction, and residents create small enterprises by producing and selling souvenirs. For education, the company partnered with the World Wide Fund for Nature (WWF) to set up visitor centers in each asset location to educate students, residents, and tourists about the importance of renewable energy in solving climate crises. About 350,000 people pass through Alternegy’s Visitors Centers each year.

The company also supports host communities during environmental and health emergencies. Alternergy provided safety facilities, medicines, and food supplies during the pandemic. Roads are also being improved through road widening and concreting projects. Business enterprises are also encouraged as the road network improves for a particular community. “Livelihood, education, health, and environment are the main components of our CSR program,” says Perez, referring to Alternergy’s corporate social responsibility initiative. “One of the keys to our success is that we always hire local people as part of our CSR team. We cannot just assign people from Manila. We must have people who speak the language so we can gain the trust of our host communities. Not only that, but in Kiangan, we are hired from different tribes because they are distinct from each other.”

On employee fulfillment, Alternergy’s family-like culture that values work-life balance manifests its success through a low attrition rate, with many employees staying in the company for more than ten years. Alternergy also maintains a workforce with a gender mix of 44 percent female and 55 percent male employees.

“As we aim to generate at least 1,096 GWh annually in the coming years, we believe that, with the support of our stakeholders, we can create a future that is regenerative, equitable, and sustainable for the next generation,” stated Vicente Perez, Jr., Co-Founder and Chairman of Altergy Holdings Corporation.

Interview

Vicente S. Perez, Jr., Chairman & Co-Founder