Ayala sells part of stake in wind farm project

The Ayala group has trimmed its stake in the 81-megawatt wind farm in Pagudpud, Ilocos Norte with the sale of a 26-percent interest to long-time Japanese partner Mitsubishi Corp.

The deal reduced the interest held by conglomerate Ayala Corp. (AC) in the wind farm project—which is owned and operated by North Luzon Renewable Energy Corp. (NLREC)—from 62 percent to 36 percent. However, Ayala remains the single largest stockholder of the wind farm project, which is already collecting feed-in-tariff (FIT) incentives from the government via guaranteed rates for every kilowatt-hour (kWh) of energy produced.

“The sale allows AC Energy to recycle capital for future investments and at the same time realize value. It also allows us to further strengthen the NLREC shareholder group with the entry of Mitsubishi, which has been a long term partner of Ayala,” said AC managing director John Eric Francia, who is also president of AC Energy Holdings Inc.

In a disclosure to the Philippine Stock Exchange yesterday, AC said subsidiary Ayala International Holdings Ltd. had sold its interest in Luzon Wind Energy Holdings BV (Luzon Wind) to Mitsubishi subsidiary DGA NLREC B.V.

Luzon Wind owns part of Ayala’s stake in NLREC, being held by AC Energy Holdings. NLREC, in turn, owns and operates the 81-megawatt wind farm in Barangay Caparispisan in Pagudpud, Ilocos Norte.

The $220-million, 81-MW wind project has 27 units of wind turbines installed atop a hill in a 625-hectare property in Barangay Caparispisan in Pagudpud.

AC and Mitsubishi have been partners since 1974, when they signed an agreement to jointly explore investment opportunities in the Philippines. Mitsubishi is also a minority stockholder of AC with an interest of 10.18 percent.

NLREC is among the four renewable energy (RE) developers that have started to collect on pre-set energy rates under the FIT system, said officials of National Transmission Corp. (Transco), which manages the fund for FIT payments.

AC has interest in another wind farm project in Ilocos, the 52-MW Bangui wind farm which is owned and operated by NorthWind Power Development Corp. The 19-MW wind farm expansion in Bangui is another RE project that now rides on the FIT regime.

Another wind energy project that now collects incentives under the FIT system are Lopez-led Energy Development Corp.’s Burgos wind project and European-funded San Carlos Solar Energy.

The wind projects are entitled to a FIT rate of P8.53/kwh for 20 years. Distribution utilities such as Manila Electric Co. and electricity cooperatives started collecting FIT charges last February. This month’s billing reflected the new FIT-allowance charge of P0.04 per kWh, a uniform charge that will be billed to all on-grid electricity consumers nationwide in support of the FIT program, which is mandated by the Renewable Energy Act of 2008.

The FIT-All charge will form part of the fund that national grid operator Transco will use to pay the FIT-eligible RE developers for the energy they will produce.