AC Energy in talks for sale of Mindanao coal-fired plant

MANILA, Philippines — AC Energy Inc., the power business of the Ayala Group, is in active talks with potential buyers for its Mindanao coal-fired power plant, but is in no hurry to unload the thermal asset, its top official said.

The company is in active discussions with parties interested to acquire its stake in GN Power Kauswagan Ltd. Co. (GNPK), AC Energy president and CEO Eric Francia said.

However, he declined to name the companies since they signed non-disclosure agreements (NDAs) with the potential partners.

Some parties who aired their interest in the GNPK facility include San Miguel Corp. (SMC) and Manila Electric Co. (Meralco).

GNPK – a limited partnership among AC Energy, the Philippine Investment Alliance for Infrastructure (PINAI) and Power Partners Ltd. Co. – is building the 4x135-megawatt (MW) coal-fired power plant in Lanao del Norte in Mindanao. 

The Ayala company has another coal-fired power plant which is the 2x122-MW coal-fired power plant under South Luzon Thermal Corp. (SLTEC), but interest is more on GNPower Kauswagan, Francia said.

“SLTEC is out there, but there’s quite a bit of interest in Kausawagan because it’s sizeable plant, it’s the most competitive in Mindanao. It’s strategically located because there will be the major substation that will ultimately be connected to Cebu because of the Mindanao-Visayas Interconnection project,” he said.

Targeted for completion in 2020, the Mindanao-Visayas Interconnection project or MVIP will directly traverse 35 barangays across Cebu in Visayas and in Zamboanga del Norte, Zamboanga del Sur, and Lanao del Norte in Mindanao.

It will be using a high-voltage direct current (HVDC) system with a 450-MW initial capacity.

In terms of finalizing the deal, Francia said deciding to sell the balance of AC Energy’s thermal platform could take a couple of months as completing the project is the firm’s top priority.

“We’re not in a great hurry for if there’s anything that will happen for the balance of our platform there’s no great rush. This will have to depend on various counter parties,” he said.

“Again our top priority at this point is to finish the Kauswagan project by 2019. We don’t want to lose focus. All four will be finished starting with unit 1. First quarter is our target for the start up of unit and thereafter  every couple of months,” Francia said.