Ayala investing $2.5b in power

Manila Standard Today
By Alena Mae S. Flores | Posted on August 31, 2012 | 12:01am

Ayala Corp. is investing $2.5 billion in power plants with a combined capacity of 1,000 megawatts over the next five years, an executive of the conglomerate said Thursday.

Ayala managing director Eric Francia told reporters at the sidelines of the Philippine Stock Exchange Renewable Energy Opportunities Forum the Ayala Group would initially infuse $500 million as equity in the projects.

“[The] 1,000 MW is our benchmark. Now, if we can exceed that, if we are fortunate enough to land some interesting acquisitions, we can exceed that. But if not, that can be tall order if it is all greenfield projects,” Francia said.

Francia said 20 percent of the 1,000-MW power portfolio would be in renewable energy projects and 100 MW in small hydroelectric power stations in partnership with Sta. Clara Power Corp.

Sta. Clara obtained approval from the Energy Department on several hydro service contracts with a combined capacity of 137.5 MW.

Francia said the Ayala Group was also looking at solar power projects and needed to revisit the plan due to the lower approved feed-in tariff rates for solar projects.

“We have a pre-development plan for anywhere between 15 MW and 50 MW but given the FIT rate, we need to revisit if it’s going to be feasible. It’s very challenging,” he said.

Ayala earlier teamed up with Mitsubishi Corp. to form PhilNewEnergy Inc. to build the P7-billion Darong solar power project in Sta. Cruz, Davao del Sur.  Francia said the company would also develop wind power projects under Northwind Power Development Corp.

Ayala’s wholly-owned unit Michigan Power Inc. acquired a 50-percent stake in NorthWind for P512 million.

“We want to have a balanced portfolio between thermal and traditional load and renewable technology,” the executive said.

Francia said the company would also pursue the expansion of the 135-MW coal project in Batangas under South Luzon Thermal Energy Corp., a joint venture between Ayala’s AC Energy Holdings Inc. and Trans-Asia Oil & Energy Development Corp.

“We’re looking across the country, including possible expansion of current plant that’s being constructed now in Batangas. We’re looking at Visayas and Mindanao. We do know those are the two areas that need new power plants,” Francia said.

He said the Ayala Group was waiting for “acquisition-related opportunities.”

Francia said the conglomerate was hoping the energy business would emerge as a strong contributor to the company’s bottom line in the future.  “Our aspiration is to make it one of the major legs, five to 10 years down the road,” he said.     source