Ayala energy unit seeks stake in Bataan plant expansion

MANILA, Philippines—The Ayala Group, through its energy arm AC Energy Holdings Inc., is in discussions with GNPower Mariveles Coal Plant Ltd. Co. regarding an ownership stake in the planned expansion of the latter’s 600-megawatt coal-fired power plant in Mariveles, Bataan.

“Ayala plans to be part of the expansion. We are still in discussion with our partners regarding the ownership stake for the expansion. It will most likely be a separate company or but it has not been finalized yet,” AC Energy president Eric T. Francia said in an interview.

Francia was referring to the planned 600-MW expansion of GNPower, whose existing 600-MW coal facility in Bataan is set to start commercial operations this month.

Should AC Energy pursue the partnership, the Ayala-led firm will not be required to increase its stake in GNPower to participate in the planned expansion, Francia explained.

In December 2012, the Ayala group acquired a 17.1-percent stake in GNPower for $155 million. The deal was in line with the Ayala group’s plan to embark on $2.5 billion worth of power projects and build a portfolio of about 1,000 MW in generation capacity over the next five years.

AC Energy has so far committed $325 million (or roughly P13.3 billion) in equity investments for four power projects out of its planned $700-million capital outlay for the energy sector over a five-year period. The amount has been earmarked for previous interest acquisitions in energy firms and for upcoming power projects.

Apart from GNPower, $20 million was used to acquire a 50-percent stake in NorthWind Power Development Corp., which owns and operates the country’s first and only wind project—the 33-megawatt Bangui wind farm; $90 million for the construction of two 135-MW coal units in Batangas in partnership with Trans-Asia Oil and Energy Development Corp., and $50 million for a mini hydropower project in North Luzon.

“Our strategy of record for AC Energy is to have a combination of conventional (or fossil fuel) and renewable energy resources. Given the realities, the need for the country to have baseload and relatively competitively-priced power, we see the mix [of ou r power portfolio] tipping toward the conventional energy (such as coal). We will deploy 70 percent of equity capital in the first five years to conventional sources and 30 percent on renewable energy sources,” Francia earlier explained.

“Over time, we will have a more balanced mix and more of renewable energy although we believe it will take us some time to get there,” he said earlier.