Ayala power unit to bid for renewable energy projects

MANILA, Philippines – The power unit of conglomerate Ayala Corp. (AC) is interested in bidding for the contracted capacity of two major renewable energy projects in Leyte and Nueva Ecija.

The acquisitions are expected to form part of AC Energy Holdings Inc.’s push to reach a generation capacity of 1,000 megawatts (MW) worth $2.5 billion in the next five years.

“For the power, we are looking for the next round of bidding. I understand the next one is Casecnan and Unified Leyte,” said John Eric Francia, managing director and head of corporate strategy of AC.

“Those are two things we are studying whether we will participate,” he added.

Power Sector Assets and Liabilities Management Corp. (PSALM) plans to auction the contracted capacities of the 640-MW Unified Leyte geothermal power plants in Leyte and the 140-MW Casecnan multipurpose hydroelectric plant in Nueva Ecija.

Last month, PSALM president and CEO Emmanuel Ledesma Jr. said it will bid out the independent power producer administrator (IPPA) contracts as separate packages in the fourth quarter.

CE Casecnan Water and Energy Co. Inc., which is owned by MidAmerican Energy Holdings Co., owns and operates the multi-purpose irrigation and hydroelectric power facility.

The Unified Leyte geothermal plants, on the other hand, include the 125-MW Upper Mahiao plant, 232-MW Malitbog and 180-MW Mahanagdong plants, and the 51-MW optimization plants. It is operated by First Gen. unit Energy Development Corp.

To date, AC Energy has yet to partner with another energy firm for the auction.

“We have not decided yet. For now, we do not have any decisions on partners for those two biddings,” Francia said.

He said parent firm AC has more than P20 billion of available cash that can fund AC Energy’s projects.

In May, ACTA Power Corp., a joint venture between AC Energy and Trans-Asia of the Phinma Group was the lone bidder in the failed auction for PSALM’s four power barges.

In the second round of bidding last month, only Trans-Asia submitted an offer to buy the power barges for P95 million.

PSALM, which is in charge of privatizing government power assets as well as managing National Power Corp.’s power plants and debt, declared the bidding a failure because the offer was way below the floor price.

Francia said AC Energy dropped the partnership because some of the conglomerate need to be prioritized.

“The economics were getting tight in that project so we let Trans-Asia do it 100 percent,” Francia said.

In the long run, the power business is expected to be a major income contributor for the conglomerate.

To date, major businesses in the Ayala group are property (Ayala Land Inc.), banking (Bank of the Philippine Islands), telecommunications (Globe Telecom Inc.) and utilities (Manila Water Co. Inc.).

AC is also engaged in electronics (Integrated Microelectronics Inc.), car dealership (Ayala Automotive Holdings Corp.) and business process outsourcing (LiveIt Solutions Inc.).