Ayala power unit inks deal with A. Brown for coal-fired plant

MANILA, Philippines – The country oldest conglomerate, Ayala Corp, has inked another partnership for its venture into the power sector.

In a disclosure to the stock exchange on Thursday, September 20, Ayala Corp said its power arm, AC Energy Holdings Inc, has entered into an agreement with A. Brown Co.’s (ABC) subsidiaries in a bid to build a 135 megawatt (MW) coal-fired power plant in Panay.

Listed A. Brown disclosed that its units Palm Consolidated Holdings Corp., Palm Concepcion Power Corp. and Panay Consolidated Land Holdings Corp. signed a Memorandum of Agreement with AC Energy to build a power generation plant in the Province of Iloilo.

The planned new plant is a 135-MW facility that will utilize the latest in clean-coal technology.

The partners plan to break ground in the last quarter of 2012.

Economic expansion

A. Brown said the plant is targeted to fill the anticipated tight power supply situation in Panay and the Visayas grids by 2015. Economic activity in the region has been expanding as population and investments increase.

A. Brown has done all the preliminary work and investments over the past two years, and the project is already in an advanced stage of predevelopment.

A. Brown said the engineering plans are ready, and important regulatory approvals have been secured.

Ayala’s power portfolio

Eric Francia, Ayala Corp managing director, earlier said they were looking at building up its power portfolio through a mix of greenfield projects and also by bidding for the contracted capacities and/or assets of the government.

Francia said Ayala plan to build at least 1,000 megawatts of power-generation capacity in the next 5 years. 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. – Rappler.com