Ayala energy unit to ramp up overseas expansion

AYALA-LED AC Energy, Inc. is setting aside the bulk of the $1.5 billion shored up from recent capital-raising activities for projects in the Philippines, Australia and Vietnam, while looking at India and Myanmar as new markets, its top official said.

Eric T. Francia, AC Energy president and chief executive officer, said 2020 would be a “massive investment year” for the company as it expands into foreign countries, in part because of the near-term supply adequacy in the country.

“This year we raised a lot of funds,” he told reporters last week. “We’ve effectively raised around $1.5 billion. Half a billion of that is already deployed, committed.”

Mr. Francia said AC Energy, which includes its listed local unit AC Energy Philippines, Inc., is looking at the five countries to invest the remaining $1 billion, with the Philippines, Vietnam, and Australia receiving a quarter of that amount or $250 million each. India, Myanmar and other markets will get the rest.

Included in the fund raising is the rough estimate of the proceeds from the upcoming stock rights offering of AC Energy Philippines, adding to the capital raised from two bond offerings and the selldown of AC Energy’s stake in AA Thermal, Inc.

“We’re looking to build over 1,500 megawatts (MW) of attributable capacity to AC Energy… for financial close by 2020,” Mr. Francia said. “That’s where we’ll deploy the billion dollars.”

He said the power plant projects would be “predominantly renewables.” The company’s overseas expansion is “partner-driven” or similar to what it had done in Vietnam and Australia.

AC Energy has two types of foreign partners — a “development” partner with experience in building power plants, and a “local” partner with knowledge of the regulatory landscape.

“They’re experts and they do the on-the-ground work, and we help on the management and governance, the financing … and the big decisions,” he said.

The Philippines, Australia and Vietnam will get the “critical mass” of next year’s investments each with an installed energy capacity of at least 400 MW. India, Myanmar and other markets are where AC Energy expects its partnership platforms to “gain traction,” Mr. Francia said.

He said completing power plant projects — many of which are a hybrid of solar, diesel and battery storage — would take about a year, except in Australia where labor restrictions might require a longer construction phase.

In the Philippines, AC Energy plans to build solar and diesel-fired power plants, and potentially expand its existing wind farms. In Australia, the company is looking at solar power and possibly, pumped hydroelectric plant, Mr. Francia said.

AC Energy has existing solar farms in Vietnam, but the capital expenditure next year is largely for wind farms as the company targets to avail of the guaranteed feed-in tariff that has a November 2020 deadline.

Mr. Francia said India provides the least cost in building energy projects, while Australia is the most expensive. No utility-scale project is planned in Myanmar.

“That’s why it’s [2020) a big year because we’ve never done 1,500 MW of new investments in one year,” he said. — Victor V. Saulon