AC Energy, Power Partners to stay in Mindanao

MANILA, Philippines — AC Energy Inc., the power business of the Ayala Group, is staying in Mindanao for the long term as it mulls to retain majority ownership along with its partner in the 4x135-megawatt (MW) coal-fired power plant in Lanao del Norte.

This is amid speculation that AC Energy and its partners are fully divesting in GN Power Kauswagan Ltd. Co. (GNPK).

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

“It is true that we have been in discussions with potential investors who are interested in the balance of our thermal assets, including a possible controlling interest in GN Power Kauswagan,” said AC Energy CEO Eric Francia.

“That said, AC Energy, together with Power Partners, has decided to retain majority control of GN Kauswagan. Our top priority is to complete the plant in 2019 and ensure that our customers get the most reliable and cost effective power in Mindanao over the long term,” he said.

Construction of the plant is nearing completion and it is expected to be in full commercial operation by 2019.

AC Energy said it would operate as a baseload plant to support the growing power demand and economic development of Mindanao.

The Kauswagan plant is strategically located as the effective gateway to the Mindanao-Visayas transmission interconnection, Francia said earlier.

Targeted for completion in 2020, the Mindanao-Visayas Interconnection Project (MVIP) would directly traverse 35 barangays across Cebu in Visayas and in Zamboanga del Norte, Zamboanga del Sur and Lanao del Norte in Mindanao.

It would use a high-voltage direct current (HVDC) system with a 450-MW initial capacity.

In selling part of its stake in GNPK, AC Energy is looking at a couple more months to rationalize its thermal platform.

“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,” Francia said earlier.

Some of parties who indicated their interest in the GNPK facility include San Miguel Corp. and Manila Electric Co.

Earlier, AC Energy sold part of its stake in a 2x316-MW coal fired-power plant under GNPower Mariveles and a 2x668-MW supercritical coal-fired power plant under GNPower Dinginin to Aboitiz Power Corp. for $579.2 million (roughly P31 billion), subject to the approval of the Philippine Competition Commission.