Ayala focuses on power

Manila Standard Today
by Jenniffer B. Austria


Conglomerate willing to invest $500m to generate 1,000 megawatts of power over the next five years


Conglomerate Ayala Corp. is prepared to invest up to $500 million to achieve its goal of generating 1,000 megawatts of power over the next five years.


Ayala chief finance officer Delfin Gonzales said in an interview the company’s target would require an annual investment of $100 million. The company plans to put up so-called greenfield power projects and acquire brownfield stations.


Gonzales said company needed to raise new funds to finance the aggressive expansion into the power sector. The company has $200 million to $300 million in deployable funds and a capital expenditure program of P6 billion to P7 billion, which it can invest in the growing industry.


Ayala has formed a joint venture with Trans-Asia Oil and Energy Development Corp. to build a 135-megawatt coal power plant in Batangas worth P12 billion. It also acquired a 50-percent stake in NorthWind Power Development Corp., a company that owns and operates the 33-megawatt wind farm in Bangui Bay, Ilocos Norte.


Ayala Corp. infused P600 million into a joint venture with Sta. Clara Power Corp. that will develop run-of-the-river hydroelectric power projects across the Philippines. Sta. Clara Power’s projects include the 1.2-MW Loboc hydropower facility in Bohol and the 0.8-MW Amlan hydropower plant in Negros Oriental.


The conglomerate, through a wholly-owned subsidiary, has formed a joint-venture company with Mitsubishi Corp. of Japan to develop solar power projects in the Philippines.


The conglomerate is also looking into infrastructure projects through the Public-Private Partnership program of the Aquino administration.


Gonzales said Ayala had been prequalified to bid for the P1.6-billion Daanghari-SLEX tollways project. The project, a 4-kilometer toll road from Bacoor, Cavite to the South Luzon Expressway, is expected to be bid out by December this year.


Ayala, in addition, is looking to bid for the operation and management of the Cagayan de Oro domestic airport. Gonzales said the new airport, which will open in 2013, sits on a property donated by the Ayala group.


Gonzales said the conglomerate had expressed interest in toll roads, mass transit and airport because they would enhance the value of the company’s existing businesses. They also provide steady cashflow over the long-term period.


Ayala has interests in banking, real estate, telecommunications, business process outsourcing, manufacturing and water utility.