Corporate News

Ayala Corp. unit secures additional funding for coal-fired power plant

Posted on July 05, 2016

A UNIT of Ayala Corp. has closed a deal to secure additional funding to build the fourth unit of its 540-megawatt (MW) coal-fired power plant in Mindanao, the holding company told the stock exchange on Monday.

In a disclosure, Ayala Corp. said its wholly owned subsidiary AC Energy Holdings, Inc. had achieved financial closure for the project, which it estimated to cost $1 billion to be funded by 70% debt and 30% equity.

AC Energy did not immediately respond to a request for additional information.

“The debt component will be financed by a syndicate of domestic and international banks,” said Ayala Corp., one of country’s oldest business groups with a diversified business portfolio that includes real estate, banking and financial services, and telecommunications.

AC Energy holds an 80% interest in the project’s proponent GNPower Kauswagan Ltd. Co., its limited partnership with the Philippine Investment Alliance for Infrastructure (PINAI) Fund and Power Partners Ltd. Co.

The coal power plant in Kauswagan, Lanao del Norte has four units each with a capacity of 135 MW.

“The power plant will support the economic development of Mindanao. Construction of the first three units of the plant is in full swing, with Unit 1 expected to be completed by fourth quarter 2017,” the company added.

Based on data from the Department of Energy (DoE), the plant’s target testing and commissioning date is in December 2017, while its target commercial operation is in March 2018.

The DoE said GNPower and the landowners of the project site were in the final stages of satisfying their respective obligations under the land purchase agreements.

The project was issued a provisional authority on April 28, 2014 for its application of a power purchase and sale agreement with Amreco PSAG Corp. and 20 participating electric cooperatives. Up to 330 MW was sold to the electric cooperatives as arranged by Amreco.

The power developer also received provisional authority from the Energy Regulatory Commission for the 20 cooperatives.

GNPower is also negotiating with other cooperatives as well as non-distribution utility customers for the sale of additional capacity, the DoE added.

AC Energy’s projects include a 50% interest in South Luzon Thermal Energy Corp., which has a coal-fired power plant in Calaca, Batangas with two units each with a capacity of 135 MW.

It also has a 20% interest in the 600-MW power plant of GN Power Mariveles Coal Plant Ltd. Co. in Mariveles, Bataan.

AC Energy also assembled a total of 133 MW of wind farm capacity, the second largest in the country, which includes Northwind Power Development Corp.’s 52-MW wind farm in Bangui, Ilocos Norte and the 81-MW wind farm of North Luzon Renewable Energy Corp. in Pagudpud, Ilocos Norte.

John Eric T. Francia, AC Energy president and chief executive officer, said in May that the company was set to meet its installation target of 1,000 MW as it was scheduled to break ground with the expansion of its Bataan coal-fired plant within the year. -- Victor V. Saulon