AC Energy to expand in Indonesia, sells Chevron PH assets stake to SM group

Chris Schnabel
AC Energy to expand in Indonesia, sells Chevron PH assets stake to SM group
Ayala Corporation’s energy arm signs an agreement with UPC Renewebles to develop small island power projects in Indonesia and divests its stake in Chevron’s geothermal assets in the Philippines to an SM group-linked investment firm

MANILA, Philippines— AC Energy, the energy arm and wholly owned subsidiary of Ayala Corporation, has announced it will deepen its presence in Indonesia and that it has sold its stake Chevron’s geothermal assets in the Philippines to the SM group.

In a disclosure to the Philippine Stock Exchange on Monday, July 24, Ayala Corporation said that AC Energy International Holdings Pte Ltd. has entered into a development funding arrangement with UPC Renewables Asia Pacific Holdings Ltd. and UPC Renewables Asia I Limited (collectively known as UPC Renewables) for the development of small island power projects in Indonesia. 

Under the terms of the agreement, AC Energy International agreed to provide funding for the development of power generation projects with sub-50 Megawatt (MW) capacities. 

The disclosure also noted that AC Energy will also have accompanying rights to participate in further construction funding of other Indonesian renewable energy projects.

“This agreement will broaden AC Energy’s participation in the Indonesian market, as well as deepen our strategic partnership with UPC Renewables” said AC Energy President and CEO Eric Francia .

“Indonesia has huge unserved demand especially in smaller islands, which this initiative aims to address,” he added.

The partnership between AC Energy and global renewable energy player UPC Renewables began in 2013 when they teamed up to develop, construct and operate the North Luzon Renewable Energy Corporation, an 81 MW wind farm project in Pagudpud, Ilocos Norte, Philippines.

In January of 2016, the two groups  also achieved financial closing on the $150 million 75 MW Sidrap wind farm joint venture project in South Sulawesi, Indonesia, set to be the first ever utility-scale wind farm project in Indonesia when it begins operations in February 2018.

Earlier this year, AC energy also acquired renewable energy developer Bronzeaok Holdings whose platform of solar and biomass energy totals more than 200 MW.

The firm is targeting 2,000 MW of installed capacity by 2020, half of which is set to come from renewable energy.

Sale of Chevron’s Philippine assets

AC Energy also announced the sale of its stake in Chevron’s Philippine assets to private investment firm AllFirst Equity Holdings Incorporated (ALLFirst) which is linked to the SM group of the Sy family.

In a separate disclosure also on Monday, AC Energy said that it “together with Star Energy Geothermal Holdings Pte. Ltd., entered into definitive agreements for the transfer of 99% of their consortium interests in ACEHI-STAR Holdings, Incorporated (ACEHI-STAR) to AllFirst”.

ACEHI-STAR is the special purpose company that signed a share sale and purchase agreement with global energy giant Chevron, to acquire the latter’s Philippine geothermal assets in December 2016.

Chevron through its subsidiaries owned 40% of the Philippine Geothermal Production Company (PGPC) which develops and produces steam energy for the 3rd party-owned and operated Tiwi and Mak-Ban geothermal power plants in southern Luzon.

AllFirst is Chevron’s current partner in PGPC and directly holds the 60% majority interest in it.—

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