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Ayala Corp. to borrow $1.6B for Luzon, Mindanao coal-fired power plants

Listed conglomerate Ayala Corp. plans to borrow roughly $1.6 billion to finance two major coal-fired power projects in Luzon and Mindanao, allowing the group to surpass a 1,000-megawatt (MW) target by 2018.
The conglomerate is constructing a 600-MW coal-fired plant in Kauswagan, Lanao Del Norte and expanding a 660-MW coal-fired power plant in Mariveles, Bataan, Ayala Corp. CFO Delfin Gonzalez Jr. told reporters in a media briefing in Makati City on Monday. 
"For these two plants... total borrowings will be close to $1.6 billion. It could be export credit agency financing," he said.
Gonzalez noted the financial closing for the Kauswagan plant is expected before the end of the year, and for the Bataan project by the middle of next year.
Through AC Energy Holdings Inc., Ayala Corp. is co-developing a 1,000-MW expansion of a 660-MW coal-fired power plant in Mariveles with GNPower Mariveles Coal Plant Ltd. Co., Power Partners and Sithe Global Power LLC – a company owned by investors of The Blackstone Group.
For the Kauswagan power plant, subsidiary AC Energy will take in a minority partner.
Once these projects are start operating, Ayala Corp. will surpass its 1,000-MW target by 2018, making the group the fourth largest power developer in the Philippines, corporate strategy and development head Paolo Borromeo said in the same briefing.

Return on equity
"We have 350 MW... A couple of our wind farms started operating. It will be under FIT. We are waiting for guidance from the DOE. It was November 11 for our NLREC project which is our 81 MW for our Bangui project," he added.
AC Energy owns 50 percent ownership of NorthWind Power Development Corp., covering the 81 MW wind farm in Bangui, Ilocos Norte. 
It also took part in the  18-MW expansion of the 33-megawatt Bangui Bay wind farm in the same province.
Gonzalez said the group also has an equity in the 155-MW South Luzon Thermal Energy Corp. coal project in Batangas. AC Energy formed a joint venture with Trans-Asia Oil and Energy Development Corp. for the project in 2011.
"That is going under commissioning and will start commercial operation by early 2015," he said.
By 2019, Ayala Corp. expects significant contributions from its power investments. "We'll look forward to a return-on-equity in the high teens on a levered basis." – VS, GMA News