Ayala to borrow $1.6 B to fund power projects

MANILA, Philippines - Ayala Corp. is planning to borrow as much as $1.6 billion to bankroll two coal-fired power projects in Luzon and Mindanao in line with its goal to become a formidable force in the power industry.

Delfin Gonzalez Jr., Ayala chief finance officer and managing director, said the company would need to raise the fund either through syndicated loans or export credit agency financing to build a 1,000-megawatt (MW) power generation facility in western Bataan province and a new 600-MW plant in Lanao del Norte.

Financial closing of the Lanao project is targeted before the end of the year while the loan for the Bataan plant is expected to be drawn in middle of 2015, Gonzalez said.

Ayala subsidiary AC Energy is co-developing the expansion of GN-Power Mariveles Coal Plant Ltd Co’s 660-MW facility in Bataan, which would allow the conglomerate to hit its 1,000 MW of attributable capacity target once the plant is operational.

In January, AC Energy acquired a 17 percent stake in GNPower.  Other parties in the Bataan plant include Sithe Global Power LLC, a company owned by investors of The BlackStone Group, and Power Partners.

AC Energy expects its equity contribution to the Bataan plant to hit more than $300 million.

The project is expected to be completed within three years, with the first unit operational by early 2017.  It will be equipped with cutting-edge technology, including four Siemens steam turbines and generators manufactured in Germany.

AC Energy currently has a net attributable capacity of 350 MW.

Gonzalez said the power generation business is expected to become a major contributor to Ayala’s recurring income.