Ayala splits energy business into two

MANILA, Philippines — Ayala Corp. has split its energy business into two wholly – owned subsidiaries, one for renewable energy and another for thermal energy, for greater flexibility in expanding its project portfolios.

In a disclosure to the Philippine Stock Exchange yesterday, the Ayala holding company said it received its board’s go ahead to form two wholly-owned platforms, namely AC Renewables Inc. and ACE Thermal Inc.

In its restructuring program, Ayala will create a new holding company, AC Renewables, and then transfer all renewable assets under the new subsidiary.

The company will then rename the existing thermal holdings company to ACE Thermal.

Meanwhile, Ayala will retain AC Energy as its umbrella brand for its energy group of companies.

“In terms of our architecture, we will retain the AC Energy, referring to the energy business group. Strictly speaking, there’s no holding company anymore for all our assets,”  AC Energy CEO John Eric Francia said in a briefing yesterday.

“AC Energy has scaled up rapidly over the last five years, and we believe that having these two exciting platforms will enable focused strategies and accelerate our growth,” AC Energy chairman Fernando Zobel de Ayala.

Francia said the restructuring will allow the group more flexibility to pursue developments in renewables and conventional power.

“We recognize that renewables and conventional power are two distinct businesses that attract different types of investors. This move therefore provides AC Energy a sharper proposition and greater flexibility in the event that we broaden our investor base for our platforms,” he said.

“The investor base and sources of capital, which we obviously need to grow, view these businesses in a differentiated manner,” he said.

Earlier, AC Energy has targeted to double its attributable capacity to 2,000 megawatts (MW), closing the gap between fossil fuel and renewable energy.

But with the separation of the renewables and conventional power entities, Francia said the 2,000 MW target will no longer be communicated and targets will be set separately.

Currently, AC Energy has 1.3 gigawatts (GW) of conventional power and around 300 MW of renewable energy projects.

“For renewables, the 1,000 MW target, that stays. For thermal, we’re already at 1.3 GW… so we are now in the process of updating our business plan for the thermal side. We still have plans of growing it,” he said.

The company has three renewable energy projects: the 52-MW Northwind Power Development Corp. in Bangui, Ilocos Norte; the 81-MW wind farm in Pagudpud, Ilocos Norte through its affiliate NLREC and the 18-MW solar plant in Negros Oriental, a joint undertaking with Bronzeoak Clean Energy Inc.

Meanwhile, its conventional power projects include the 668-MW GN Power Dinginin Ltd. Co. coal plant in Bataan, the 604-MW GNPower Mariveles, the 2x135-MW coal-fired power plant in Calaca, Batangas under South Luzon Thermal Energy Corp. and the 4x135- MW coal-fired power plant in Kauswagan, Lanao del Norte in Mindanao through GN Power Kauswagan Ltd. Co.