Ayala power unit transfers interest in Lanao coal plant

AC Energy Inc., the power business of the Ayala Group, is transferring its majority interest in the 4x135-megawatt (MW) coal-fired power plant in Lanao del Norte in Mindanao to its partner as part of rebalancing its generation portfolio.

In a disclosure to the Philippine Stock Exchange yesterday, AC Energy said it signed a binding agreement for the transfer of its indirect ownership in Kauswagan power plant in favor of its partner, Power Partners Ltd. Co.

Power Partners is AC Energy’s existing developer-partner in the GN Power Kauswagan Ltd. Co. (GNPK) project.

“The transfer will be implemented in tranches, with the final transfer price to be agreed upon by the parties at a later date after taking into account agreed adjustments,” AC Energy said.

Completion of the transaction is subject to conditions and approvals by the Philippine Competition Commission and the lenders of the GNPK project.

AC Energy said the transfer of its interest in the project is part of a plan to rebalance its generation portfolio by unloading half of its stake in its thermal energy platform and growing its renewable energy capacity.

“The transaction is aligned with AC Energy’s effort to rebalance its portfolio and to achieve its target of at least five gigawatts of renewable energy attributable capacity by 2025,” it said.

Out of the five GW target, AC Energy expects renewables to contribute at least 50 percent of the total energy output.

AC Energy, based on its equity interest in power generation businesses, owns approximately 1.6 GW of generation capacity in operation and under construction.

Late last year, AC Energy president and CEO Eric Francia said the company was in talks with potential buyers for the GNPK plant, which was named as among the country’s energy projects of national significance (EPNS).

As one of the EPNS, the GNPK power plant will be entitled to all the rights and privileges under Executive Order 30.

The EPNS is intended to establish a simplified approval process and harmonize the relevant rules and regulations of all government agencies involved in the permitting process.

Signed by President Duterte in June 2017, EO 30 provides that government agencies concerned with energy projects should presume other agencies were able to act upon and issue their respective permits within a 30-day period.

If not acted upon five days after the lapse of 30 days, these projects are deemed approved.