Ayala sets $500-M equity investment for power projects

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THURSDAY, 30 AUGUST 2012 21:52 PAUL ANTHONY A. ISLA / REPORTER

CONGLOMERATE Ayala Corp. is beefing up its power-sector portfolio with a plan to build at least 1,000 megawatts of power-generation capacity in the next five years, Eric Francia, the company managing director, told reporters.

At the sidelines of the Philippine Stock Exchange’s Renewable-Energy Opportunities Forum on Thursday, the Ayala official said the targeted generating capacity would entail $2.5 billion in investments.

Francia added that they have earmarked $500 million as equity for these planned projects.

“The 1,000 MW is our benchmark. If we can exceed that, and if we are fortunate to land some interesting acquisitions, then we can exceed that. But if not, that can be a tall order if it’s all going to be greenfield projects,” he said.

Francia added that one-fifth of the targeted 1,000 MW is expected to be renewable energy-based projects. He said bulk of this target or 100 MW would come from hydropower projects and will be done in partnership with Sta. Clara Power Corp.

Sta. Clara holds several hydropower service contracts in different sites around the country, which could generate a total of 137.5 MW.

Francia said they would also need to revisit their plans for solar-power projects in light of the approved feed-in tariffs (FITs) of P9.68 per kilowatt-hour for solar-based renewable-energy projects.

“We have a pre-development plan for anywhere around 15 MW to 50 MW. But given the approved FIT rate, we need to revisit if it’s going to be feasible,” he added.

Ayala earlier partnered with Mitsubishi Corp. to form PhilNewEnergy Inc., which will build the P7-billion Darong solar-power project in Sta. Cruz, Davao del Sur.

Francia said Ayala will also look at wind-power projects under Northwind Power Development Corp. 

Ayala-led Michigan Power Inc. has acquired half of NorthWind for P512 million.

Francia said they want to have a balanced portfolio between conventional power systems and renewable energy-based systems.

He added that they are also proceeding with expansion of the 135-MW coal project in Batangas under South Luzon Thermal Energy Corp., a joint venture between Ayala-led AC Energy Holdings Inc. and Trans-Asia Oil & Energy Development Corp.

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

He added that undertaking an initial public offering of Ayala’s power portfolio might take a long time, saying that it may not be in the immediate future.

Francia said they plan to make the energy business a strong contributor to their overall bottom line. “Our aspiration is to make it one of the major legs in five to 10 years down the road,” he added.    source