Ayala and TA Oil tie up for Luzon 135-megawatt coal power project

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WEDNESDAY, 29 JUNE 2011 19:37 MIGUEL R. CAMUS / REPORTER

CONGLOMERATE Ayala Corp. and Trans-Asia Oil and Energy Development Corp. (TA Oil) of the Phinma group are teaming up for a 135-megawatt (MW) “clean” coal power plant to rise in Batangas.

Both companies separately disclosed to the Philippine Stock Exchange that they will each own 50 percent of a new firm to be called South Luzon Thermal Energy Corp. The said company will be initially capitalized at P200 million to handle the power project.

The P12-billion project was initiated by TA Oil, which earlier said it is looking foreign or local partners for its power ventures to free up resources for other projects. Ayala, in turn, is assembling a 1,000-MW renewable and traditional energy portfolio in the next five years, joining other conglomerates in diversifying into this lucrative sector.

TA Oil said earlier with the power plant will use circulating fluidized bed boiler technology and is targeted for completion in the middle of 2014.  The company said 70 percent of the Batangas project will be financed through debt instruments to be arranged by BDO Capital and Investment Corp.

“This project will help contribute to building the much needed base load capacity to meet the growing demand for power in Luzon,” Ayala president and chief operating officer Fernando Zobel de Ayala in a statement on Wednesday.

“We look forward to leveraging each other’s strengths in developing and running a modern and environment-friendly facility that will contribute to the country’s power supply generation through conventional source using clean technology,” TA Oil vice chairman Ramon R. Del Rosario Jr. said in the same statement.

Ayala is buying into the Batangas project through power arm AC Energy Holdings Inc. which in the past year has signed joint-venture agreements with various partners for solar and mini-hydroelectric projects across the country.

AC Energy also acquired a 50-percent stake in Northwind Power that operates the wind farm in Bangui, Ilocos Norte.

Apart from the Batangas project, TA Oil is studying wind power projects in Guimaras province has bought a minority interest in a geothermal venture in Calamba, Laguna and in Sto. Tomas, Batangas.

Both Ayala and TA Oil disclosed the agreement after the noontime close of trading yesterday. Ayala shares lost 1.36 percent to P378.20 while TA Oil declined 0.94 percent to P1.05 each.