SMC, AboitizPower interested in AC Energy’s thermal-energy assets up for sale

By Lenie Lectura – May 21, 2018
from Business Mirror

SAN Miguel Corp. (SMC) and Aboitiz Power Corp. (AboitizPower) said on Monday they would look into AC Energy Inc.’s thermal-energy assets that are up for sale.

“We will study,” SMC president Ramon S. Ang said in a text message when asked if SMC’s power unit is interested.

The  power portfolio includes the Sual Power Plant in Sual, Pangasinan; San Roque Hydroelectric Multipurpose Power Project in San Manuel, Pangasinan; and Ilijan Power Plant in Ilijan, Batangas, among others.

Separately, AboitizPower President Antonio Moraza said the company is always on the lookout for opportunities.

“AboitizPower will look at any potential deals that are available. Unfortunately, there are potential deals that may or may not carry NDA [nondisclosure agreement] in which case, we are not free to comment,” he said.

When pressed to comment if the company is interested considering that Aboitiz and AC Energy have already teamed up in a coal-power project in Bataan, Moraza may have hinted there could be a deal in the making.  “We can’t comment on potential deals that have NDA. You’ll have to wait.”

Aboitiz and AC Energy are constructing the first unit of the 2×668-megawatt (MW) coal-power project being undertaken by GNPower Dinginin Ltd. Co. (GNPD), composed of Therma Power Inc. (TPI), a wholly owned subsidiary of Aboitiz Power Corp.; AC Energy; and Power Partners Ltd. Co., a partner of AC Energy.

AC Energy  and TPI each have a 50-percent beneficial economic interest in the GNPD project. The estimated project cost of the GNPD project is $1.7 billion.  Construction of the first unit is well under  way, and is targeted for commercial operations by 2019, with the second unit scheduled for completion by 2020.

Last Sunday AC Energy announced it is currently in discussions with potential investors to sell as much as 50 percent of its thermal assets in a bid to balance its renewable and thermal portfolios.

AC Energy’s entire power-generation portfolio of 1,600 MW carries an estimated value of $2.6 billion, according to investment group CLSA Ltd.  Of the $2.6 billion, 80 percent, or $2 billion, is thermal assets.

Eric Francia, President and CEO of AC Energy, said the sale is also meant to raise capital to support growth as the company expands in the region.

“While we will grow our renewables exponentially, we shall continue to grow our thermal platform in the Philippines and around the region,” he added.

AC Energy has 1.3 MW of conventional power and around 300 MW of renewable-energy (RE) projects.

Its RE projects are 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 2×135-MW coal-fired power plant in Calaca, Batangas, under South Luzon Thermal Energy Corp.; and the 4×135-MW coal-fired power plant in Kauswagan, Lanao del Norte, in Mindanao through GN Power Kauswagan Ltd. Co.

The company is currently active in developing RE projects overseas in a bid to grow its presence in Southeast Asian markets.

In January Ayala Corp. announced it divided its energy business into two wholly owned subsidiaries—AC Renewables Inc. and ACE Thermal Inc.

All renewable assets were put under AC Renewables and its existing thermal holdings company will be renamed ACE Thermal.  AC Energy remains its umbrella brand for its energy group of companies.

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