AC Energy to leave coal projects

Published November 23, 2020, 7:00 AM

by Myrna M. Velasco

            Ayala-owned AC Energy Philippines is breaking free from coal-fired generating facilities, hence, it is casting the divestment of its shareholdings in the 1,336-megawatt Dinginin power project and the 360MW Mariveles coal plant, its joint venture with the Aboitiz group.

           The timing of the sale, according to AC Energy President and CEO Eric T. Francia, will be reckoned following the commercial operations of the two generating units of the Dinginin facility.

           As had been submitted to the Department of Energy (DOE), the Dinginin plant’s first unit of 668MW will be on commercial stream by March to April next year; while the second unit of another 668MW will be operational by 2022.

           When asked on the timeline of the anticipated business breakup, Francia told reporters “We would want to make sure that the plant is operating well and then we can revisit the potential divestment plan for our thermal.”

           It was in 2018 when Aboitiz Power Corporation bought into the Dinginin and Mariveles power assets with capital injection of $579.2 million; and that afforded it beneficial ownership of 70-percent in the Dinginin facility; and a higher 78.325-percent in the Mariveles plant which was already operating commercially during the acquisition.

          In the joint venture’s corporate vehicle AA Thermal Inc., Aboitiz Power cornered 49-percent voting stake; and 60-percent economic equity.

          “The balance of the AA thermal, we’ll be looking at the next couple of years. Perhaps, we want to complete the units first (for the Dinginin plant). As you know, unit 1 is targeted for commercial operations early next year – between March and April is our estimate for full commercial operations. Soon after that would be unit 2,” Francia specified.

          The AC Energy executive added “We’re not in a rush but once the plant is operating well, and it’s reliable, then we could think about passing the baton…we want to make sure that the plants are operating well.”

          On its coal technology jettison, the Ayala firm first unloaded its stake in the 552MW Kauswagan coal-fired power project in Mindanao grid — via a deal that it entered into with partners at GNPower Ltd. Co., primarily with Philippine Investment Alliance for Infrastructure (PINAI) Fund and Power Partners. This transaction is expected to close first quarter of 2021, according to Francia.

          The Ayala group is currently transforming its investment strategy in the energy sector – with a thrust to becoming one of the largest renewable energy listed company in the Southeast Asian region.

          “We’re really very bullish about the energy transition. It’s happening everywhere, globally. It’s happening right in front of our eyes, in the Philippines and around the region,” he stressed.

          Francia added AC Energy is whetted to “play a leading role in the energy transition particularly toward shifting to renewable technologies.”

          The thermal assets that will remain in the company’s portfolio, he said, will be dual-fuel installations that could run both on diesel and gas or liquefied natural gas (LNG) to address the variability of RE technologies like wind and solar; and their investment rollout shall also be coupled with battery storage.

          “To us, it’s a very unique window of opportunity and we’ll be there to make sure that we’ll be leaders in the space. That’s crystallized in our aspiration to be the largest listed renewable platform in Southeast Asia,” Francia emphasized.