A Brown, Ayala's AC Energy to build P12.5-B power plant

MANILA, Philippines - A. Brown Co. Inc. and Ayala-led AC Energy Holdings Inc. will jointly build a 135-megawatt power generation plant in the province of Iloilo at an estimated cost of P12.5 billion, company officials said yesterday.

In a disclosure to the Philippine Stock Exchange, A. Brown said the plant, on track to break ground within the fourth quarter of the year, will utilize the latest in clean-coal technology.

Plans include a second 135 MW facility for future development, A. Brown said.

Targeted to be operational by 2015, the project will be undertaken by A. Brown subsidiaries Palm Thermal Consolidated Holdings Corp., Palm Concepcion Power Corp. (PCPC) and Panay Consolidated Land Holdings Corp.

The plant is targeted to fill the anticipated tight power supply situation in Panay and the Visayas grids by 2015 as economic activity continues to expand in the area, A. Brown said.

“The corporation has done all the preliminary work and investments over the past two years, and the project is already in an advanced stage of pre-development. The engineering plans are ready and important regulatory approvals have been secured,” said A. Brown vice-president and concurrent PCPC president Roel Castro.

The project also marks another milestone for AC Energy which continues to expand its power portfolio to ensure a stable platform for growth.

“We are pleased to be partnering with A. Brown and hopefully with the combined expertise and experience of both companies, we can be a major player in the power generation sector in the years to come,” said John Eric T. Francia, managing director at Ayala Corp. and chief executive officer of AC Energy.

“We have a dedicated group, AC Energy, that is actively investing in the power sector, and the Ayala Group would like to pursue opportunities with A. Brown as one of our partners,” Francia said.

Walter Brown, chairman of A. Brown, for his part said: “This partnership clearly validates the quality and value of the projects that we have conceptualized, originated and nurtured. It also demonstrates the technical abilities, long-standing experience and capabilities of A. Brown and its management team to bring meaningful and value-added projects to the fore.”

“This is a welcome development for Panay in particular and Visayas in general, as this will ensure the availability of steady, reliable and cheaper power to fuel anticipated growth and development in key areas like Iloilo City, Bacolod City and Boracay. Our commitment to Panay is long-term, as we stand ready to build another 135 MW of capacity if there is a need for it,” Castro said.

While the Visayas power grid has stable supply of electricity, it will need additional power plants in the next five years to cope with the growing demand for power from consumers.

The Department of Energy earlier said the Visayas grid has 300 MW of reserve energy and that consumers are only utilizing 1,400 MW of the 1,700 MW available in the grid.

Aside from power, A. Brown currently manages a 2,200-hectare palm plantation in Mindanao, with its own milling operations and an oil processing plant scheduled to be operational in the first quarter of 2013. Plans are also underway to increase the plantation size to 10,000 hectares in the coming years, as the company seeks to address perennial shortages of palm oil in the domestic market.

The company is also a premier developer of quality real estate in Northern Mindanao, with a solid reputation and track record in Cagayan de Oro, where the bulk of its developments have been located since 1995.