Ayala taps investment fund for new wind farm projects

Conglomerate Ayala Corp. has teamed up with the Government Service Insurance System-led infrastructure fund Philippine Investment Alliance for Infrastructure (Pinai) to develop new wind farm projects with a capacity of at least 200 megawatts in Caparispisan, Ilocos Norte.

An initial equity investment has been agreed upon for the first 81-MW project in the portfolio with an investment value of about $220 million, with AC Energy Holdings Inc. providing 64 percent of equity and Pinai funding 32 percent, Ayala said in a statement. US-based renewable energy group UPC has taken the remaining 4-percent interest in this venture.

The initial phase of the project is expected to be connected to the grid by June 2014. “The joint venture company has over 200 MW of projects under development,” said Ayala managing director Eric Francia.

The project cost for the first phase suggested the venture might invest $2.72 million for every single MW of additional wind power generation capacity, which in turn implied that $543.2 million in investment would be needed to build a 200-MW greenfield wind farm portfolio.

AC Energy, Pinai and UPC have formed a joint-venture company called Northern Luzon UPC Asia Corp. (NLUPC) for the wind farm project. An investment framework and shareholders’ agreement had been signed with UPC Philippines Wind Holdco B.V., a wholly owned company of UPC Renewables Partners and Pinai, a P26-billion infrastructure fund spearheaded by the GSIS and managed by Macquarie Infrastructure and Real Assets (Mira).

“The project will grow AC Energy’s wind farm portfolio in the Philippines, building on its current 50 percent ownership of NorthWind Power Development Corp. which already operates a 33-MW wind farm in Bangui, Ilocos Norte,” Ayala said.

Over the past two years, AC Energy has established a pipeline of power assets and has committed more than $300 million in equity in conventional and renewable energy technologies.

Ayala announced that the first 81-MW project received a declaration of commerciality last June 17 from the Department of Energy. Accordingly, Northern Luzon UPC has signed the turbine supply, installation and service availability agreements with Siemens Wind Power A/S and Siemens Inc. The contractor was given the notice to proceed with the project.

In an interview, GSIS president Robert Vergara said the pension fund was very excited with this project, which is Pinai’s very first investment.