Charging Ahead

Leandro Leviste

THE PROFILE

BY ROEL LANDINGIN PHOTOGRAPHS BY SONNY THAKUR FOR FORBES ASIA

looks to grow

C H A R G I N G

the Philippines’ solar power industry.

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Leandro Leviste, the son of a prominent Philippine senator, has had no trouble opening doors in Manila, but the young Filipino CEO says he sometimes isn ’t taken seriously. That made him welcome the switch from in-person meetings to online video during the Covid-19 lockdowns.

“We used to go to older people ’ s offices and they would look down on us because we looked like a startup, ” says the 28-year-old boss of Solar

Electric utilities in the Philippines are expected to source at least 35% of their power needs from renewables by 2030. Philippines Power Project Holdings Inc., or SPPPHI.

“When we talk to investors and partners remotely, the age disparity becomes less apparent. ”

What’ s very apparent is that Leviste is a young man in a hurry to lift how much solar power the Philippines uses. He now has two solar farms in operation, with a combined capacity of 163 megawatts (MW). But he has preliminary permits and a goal of completing all the groundwork including financing for 10 gigawatts of capacity by 2025. That’ s 60 times more than his current operating level and roughly 7.5 times the total amount of solar capacity for the entire country.

As with many other countries, the Philippines aims to jump on the renewable energy bandwagon, especially given that the country gets plenty of sunshine. Regulations require electric utilities to source at least 35% of their power needs from renewables by 2030, compared with 21% in 2020. So far, solar accounts for only 3%.

Leviste ’ s expansion plans won ’t come cheap—he estimates it could cost around $8 billion in total. But Leviste thinks the ambitious goals are attainable, and to reach them, he will need substantial help from partnerships. So far, he has teamed up

“I grew up being taught, ‘don’t wait to buy land, buy land and wait. ’ ”

with Philippine billionaire Enrique Razon Jr. and Jaime Zobel de Ayala ’ s Ayala group. Also, Korea Electric Power (Kepco) paid nearly $40 million for 38% of his first farm in operation, in Batangas Province, where Leviste ’ s father was once governor. It is operated by Solar Philippine Calatagan Corp. (SPCC), which as of June was 62% owned by parent SPPPHI.

Leviste isn ’t just eyeing expansion at home. He has a project planned for Indonesia too, together with the Panigoro family ’ s Medco Energi, which in March signed a power-purchase agreement (PPA) with the state utility PLN involving two proposed 25MW farms in Bali.

Large solar expansion requires three things: swathes of land for farms, big capex financing and a PPA for guaranteeing long-term sales to electric utilities that will distribute the solar power. The Philippines, unlike Indonesia and many developing countries, does not have a sole state-owned distributor of electric power.

Leviste has land, which he is hoping gives him a first-mover advantage in some areas. Over seven years, Leviste has bought or leased relatively flat agricultural and pasture lands near transmission lines, largely in Luzon, the most populated island. The businessman, who has a target of getting control of 10,000 hectares, says his father ’ s family, with a real estate business, bought land in Makati in the 1970s at around 100 pesos (about $7 then) a square meter. “I grew up being taught, ‘Don ’t wait to buy land, buy land and wait, ’ ” he says.

For financing, some will come through his listed Solar Philippines Nueva Ecija Corp. (SPNEC) and more is expected from partnerships. For Leviste, a pivotal tie-up is with Razon, whose Prime Infrastructure Capital holds 50% in two jointly owned solar projects. Solar Philippines Tarlac, with 100MW capacity, is already in operation, while Solar Philippines Tanauan, building a total of 170MW in two sites, expects to produce from early 2023.

The two businessmen eye much larger capacity. In 2021, through SPPPHI and Prime Infrastructure, they formed a joint venture called Terra Solar Philippines, in which Razon has 50.01% and Leviste has 49.99%. In the near future, it hopes to successfully complete negotiations of a 20-year PPA for a hefty sale of power to Manila Electric Co. (Meralco), the only distributor in Metro Manila, from solar farms to be developed with Razon. These farms, to be located across at least five provinces in Luzon, would have a combined total gross capacity of at least 2,500MW, and could be the largest solar power operation in the world. A 20-year PPA would open the way for bank loans for the project.

Property and Politics

Whether Leandro Leviste proves a success as a big developer of solar power in the Philippines, his family name is already well known. A street in Makati central business district is named after his late grandfather Lauro P. Leviste, who was a real estate broker, in recognition of his role in developing the area near Manila after World War II.

With Leandro’s foray into land for solar projects, the Leviste family now has been involved in property for three generations. Leandro’s father, 82-year-old Antonio Leviste, was a successful developer in Batangas Province, where he was governor from 1972 to 1980. In 2009, Antonio was convicted of homicide for the 2007 shooting death of a long-time aide, and he was imprisoned until 2013. Antonio said it was in selfdefense but the court rejected his claim, noting the aide was shot five times.

Leandro’s mother, 62-year-old Loren Legarda, is among the country’s most popular politicians. In the May election, she got the second-highest number of votes among 64 candidates vying for open Senate seats. The former broadcast journalist earlier served two terms as a senator. She and her husband separated in 2003, and their marriage was later annulled.

Leandro caught flak during deliberations in 2019 on a legislative franchise for a Solar Philippines subsidiary aiming to provide solar power to off-grid and underserved areas. It was opposed by utilities who feared this would violate their exclusive charters but supported by leaders of electricity-deficient areas. He was criticized as benefitting from his mother then chairing the powerful Senate finance committee. “Not at all, ” Leandro told reporters in December 2018.

“This is purely on the basis of merit. ”

Legarda abstained from voting on the measure and denied lobbying for its passage. The bill eventually passed after clearer limits were added on the subsidiary’s scope of business. In 2022, Congress passed a law that let other microgrid service providers do business in power-starved communities without getting a congressional franchise, providing more competition.

In late June, Solar Philippines won five longterm contracts to sell power to the wholesale electricity spot market after a Department of Energy competitive tender, creating a market for several projects with a combined gross capacity of 2,000MW. It also submitted an unsolicited offer to supply baseload power to Meralco for 24 hours a day for 20 years from 2024 by building a solar farm with a gross capacity of 1,800MW, supplemented by batteries.

For pursuing his overall plans, Leviste ’ s listed company is a linchpin. Some of the 2.7 billion pesos ($50.6 million) raised in its December IPO will go for construction of the first phase of a 500MW solar farm, 100km north of Manila, that would be the country ’ s largest to date. During July, SPNEC hopes to launch a rights offering to raise between 3 billion and 3.3 billion pesos. Shares of SPNEC, which began trading at 1 peso, were trading at around 1.65 pesos in late June.

In March, SPNEC approved a plan to buy its parent company ’ s stakes in more than 20 planned solar generation projects across the Philippines. SPNEC is issuing 24.4 billion new shares as payment. The parent’ s ownership of SPNEC is expected to fall to 54.2% from 66.8% after the rights offering.

For the six months ended in March, SPNEC reported a loss of 48.3 million pesos. Unlisted SPPPHI said its net income in 2021 increased sixfold to 806.4 million pesos, though that was mainly due to the sale of its stake in a subsidiary. Revenue fell 19% to 1.23 billion pesos.

eviste first got interested in building a solar power business in the Philippines in 2013. He was interning at Meralco during a summer break from Yale University where he was studying political science. Leviste was intrigued by Elon Musk’ s companies Tesla and SolarCity, which led him to feel there was an opportunity at home to supply solar power more cheaply than what Filipinos were paying for electricity generated from fossil fuels.

During his second year at Yale, Leviste dropped out and returned to Manila. His father then knocked down a sprawling mango orchard and lots planted with other crops in Batangas, and used the land as security for a loan for a solar project. SPCC, the company he set up in 2015 to build the solar plant, pledged all its common shares to three banks. Leviste spent months at the 106ha site, overseeing the installation of over 200,000 photovoltaic (PV) panels. “It’ s just like building with Lego, ” he says.

Leviste says he went “ all in ” on solar. After his company in 2016 met a demanding deadline for completing that first gridscale power plant, to qualify for pivotal tariff subsidies, he put up a marker inscribed “A monument to ‘It can ’t be done. ’ ” —a message for skeptics who thought he wouldn ’t finish on time.

Alberto Dalusung III, a former director at the energy department and currently a member of the National Renewable En-

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35,000

RISE AND SHINE

The Philippine government sees now-small solar power capacity increasing steadily for many years.

CUMULATIVE INSTALLED SOLAR POWER CAPACITY UNDER THE PHILIPPINE ENERGY PLAN 2020-2040

(IN MEGAWATTS)

2022 onward are forecast/estimate

30,000

25,000

20,000

15,000

10,000

5000

0

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040

Source: Department of Energy

Solar Philippines Power Project Holdings operates two solar farms, with capacity of 163MW.

ergy Board, is upbeat about what can be done with renewables, noting a USAID-funded study that identified nine competitive renewable energy zones in Luzon with an estimated 35 gigawatts (GW) of solar capacity and 54GW of wind capacity. “We ’ re really moving towards renewables, ” he says. “The potential is so much bigger than what Solar Philippines has envisioned. ”

If Philippine use of solar power increases significantly, however, Leviste could face stiffening competition and higher costs, says Joey Roxas, CEO of Eagle Equities in Manila. “The cost of land may rise but as the number of solar producers increase, competition could also depress power rates they could charge, ” he notes.

Eduardo Francisco, president of BDO Capital & Investment, a subsidiary of the country ’ s largest lender, notes that the cost of providing solar power has gone down, thanks to cheaper PV panels, and describes Leviste ’ s business model as “basically workable, ” But he adds, “It remains to be seen if there are enough PPAs being tendered between now and 2025 to cover Solar Philippines ’ 10GW plan. ”

Leviste has vied aggressively for long-term contracts to supply solar power to Meralco, the country ’ s largest electricity utility. He won his first deal in 2017 by offering to sell at only 2.999 pesos per kilowatt hour at a time when Meralco ’ s average cost of power was around 4.6 pesos per kwh. “I sacrificed future profits on that deal but if you consider that as our marketing expense to win future contracts, then it was the best investment that we ever made, ” Leviste explains.

Though his solar business is now positioned to expand significantly, Leviste admits that many of his early bets didn ’t deliver as expected, prompting the company to stop making solar panels and installing them on residential and commercial building rooftops. Targets have been scaled down for a subsidiary that aimed to provide solar power to off-grid and underserved areas throughout the country, for which it has secured a non-exclusive franchise from Congress in 2019. “Microgrid, commercial and residential rooftop will just account for a tenth of solar power use. The rest will come from solar farms connected to the grid, ” he says. “We ’d still love to do off-grid electrification on a CSR [corporate social responsibility] basis from the profits that we make from the solar farms. ”

Leviste says the biggest source of value for his solar business isn ’t going to be in the dividends from holding the operating assets for 25 years. “It’ s on buying land at 200 pesos per square meter, and revaluing it once it’ s industrial to 1,000 pesos per square meter, and infusing it into equity for a joint venture which would have a present value of 2,000 pesos per square meter. That’ s how we can turn one peso into ten pesos over time, ” he says. Aware of the obstacles to sharp expansion, he half-jokingly says, “We ’ re accumulating land left and right, but might just end up with cattle-raising as a business. ”

The Evolution of a Bespoke French High Perfumery

Family-owned perfume maison Henry Jacques invites lovers of fine fragrance to step into the exclusive world of French high perfumery.

Countless brick-and-mortar stores have been casualties of the digital transformation that has reshaped the retail landscape in recent years, but many consumers at the high end of the beauty market still desire personalized, face-to-face interactions with their favorite brands.

A recent survey by global retail tech agency Outform revealed that more than half of the 2,000 respondents preferred purchasing beauty products in person, with around 40% citing the experience of being in a boutique and consulting with brand experts as being influential in their purchasing decisions.

These findings reflect the thinking that saw family-owned perfume maison Henry Jacques take its first decisive step into retail in 2014, with the opening of an exclusive space within the Salon de Parfums at Harrods in London—a dedicated space to interact with and better serve its discerning clientele.

Founded in 1975, Henry Jacques has forged a reputation for creating bespoke scents of the highest quality. Initially introduced to a small group of private clients, these one-off, bespoke fragrances were created to complement its wearer—to invoke personal memories and emotions, and to become an extension of their identity. Clients were able to have their tailor-made scents housed in uniquely designed crystal flacons, collaborating with the brand’ s experts to create an artisanal fragrance that becomes uniquely theirs.

As the clientele for bespoke offerings grew over the next few decades, an archive of some 3,000 unique scents sporting names such as “Rose Snow, ” “Merveilleuse ” and “Et Pourtant” was curated, forming the pillars of the maison and building on the legacy of French high perfumery.

Under the guidance of Henry Jacques ’ daughter, Anne-Lise Cremona, the move into retail was part of an ambitious plan to introduce French high perfumery to a wider audience. Since taking over the reins of the company in 2011, Ms Cremona has opened the doors of Henry Jacques to more people with the launch of 50 scents during the brand’ s public debut—a decision made possible thanks to Henry Jacques ’ fragrance archive.

Known collectively as Les Classiques, the 50 fragrances are created in three forms: Les Essences, oils housed in minimalistic crystal

Henry Jacques’ Paris boutique along Avenue Montaigne

flacons and applied directly to the skin with a crystal rod; Les Brumes, a lighter and modern way of enjoying the art of high perfumery with liquids housed in a unique ‘ splash and spray ’ convertible flacon; and the Clic-Clac, the brand’ s take on solid perfumes, which are essentially scents that come in a balmlike form.

Following the success of its first foray into the retail landscape with Harrods, Henry Jacques has brought this curated physical experience to more locations around the world, with eight boutiques opening in cities such as Singapore, Dubai and Beverly Hills.

Breaking New Ground

From creating bespoke fragrances for private clients to making its mark on the luxury retail world, Henry Jacques has grown from strength to strength since its founding. That journey continues to this day with the opening of Henry Jacques ’ ninth boutique globally in the heart of Paris in May this year. Situated across the river from the Eiffel Tower, the 400-square-meter duplex space is the brand’ s first standalone boutique in Paris, on one of the most iconic Avenues in the world—Avenue Montaigne.

This new boutique takes visitors on an exhilarating journey through the world of French high perfumery, where they can observe Henry Jacques ’ designers delicately manipulating the raw materials responsible for creating some of the world’ s most precious and prestigious perfumes.

The brand’ s artistic director, Christophe Tollemer, has brought the splendor of Henry Jacques ’ legacy to life through historic Parisian architecture and timeless charms sprinkled throughout the space. Welcoming customers with a small garden—a rarity along the historic avenue—and colorful flagons within the lab-like interior space, the boutique celebrates the French art of living with classic collections of jewelry, art and historical pieces adorning the walls.

The key focus, however, remains very much on the creation of exceptional scents. A special lounge dedicated to bespoke fragrances allows connoisseurs to compose their personal fragrances in complete privacy during consultations with Henry Jacques ’ experts.

Inside Henry Jacques' Paris boutique

Marrying Innovation with Tradition

As it honors the traditions of French high perfumery, Henry Jacques also continues to push the boundaries of what is possible through a culture of innovation. One recent highlight of this desire to blaze new trails was the creation of the Clic-Clac in 2021, an accessory that houses the brand’ s new collection of solid perfumes.

A sophisticated creation, the Clic-Clac revives the gesture of applying solid perfume; the wearer only needs to pick up a small amount of the scent’ s wax on the fingertips, before dabbing it on his or her pulse points. Named after the sound it makes, the Clic-Clac opens with a simple slide to reveal a single circular perfume capsule ready for application, and similarly shuts with ease with a slight push.

Borrowing techniques from the expertise of Swiss watchmaking, the Clic-Clac was developed after more than four years of development to ensure its longevity before it was able to reach its current standard of patented engineering. The accessory is available in materials such as titanium, carbon and gold, and can house Les Classiques scents in the form of interchangeable solid perfume capsules.

The modernity of the Clic-Clac, and the revived art of solid perfumes, encapsulates Henry Jacques ’ vision—the traditional art of French high perfumery enhanced with modern innovations, reflecting Ms Cremona ’ s keen desire to continue bringing the maison to greater heights in the coming decades.