Ayala Corp. (AC) will require a total of $1.6 billion in financing to develop large coal power projects in Luzon and Mindanao that will make the conglomerate one of the country’s top power producers, its officials said in a briefing.
According to chief financial officer Delfin C. Gonzales Jr., the funding will support two coal-fired power projects: A 600-megawatt (MW) project in Lanao del Norte province in Mindanao and a 1,000-MW project in Bataan province.
Asked on the tenor of borrowings, Gonzales said, “For power, they have to be long-term.
I guess we’re looking over 10 years, whether it’s domestic or offshore.” Treasurer Ma. Cecilia T. Cruzabra said export credit agency funding will likely be tapped, but the structure and other specifics —like how much goes to the Lanao del Norte project and how much to the Bataan project— have not been set.
The project in Lanao del Norte may entail a project cost of $1 billion to $1.2 billion with financial closing planned within 2014.
The project in Bataan may entail $600 m (with financial closing in mid-2015), of which $300 million will be the Ayala group’s equity share.
When the two projects come online in 2018, the Ayala group will be the Philippines’ fourth largest power producer in terms of share in various projects or “attributable capacity”, said Paolo F. Borromeo.
Power, which is in high demand amid rising consumption and domestic economic expansion, and infrastructure will be the leading drivers of noncore business growth for Ayala Corp. by that time, he said.