Ayala Group boosting energy, infrastructure projects

Ayala Triangle in Makati City (Wikipedia)

MANILA — Conglomerate Ayala Corp. is boosting its new portfolio of businesses in power generation and transport infrastructure as it targets ramping up profit to Php20 billion at least in the next two years.

John Eric Francia, head of Energy and Infrastructure Group at Ayala Corp., said the demand is there as the Philippine economy grows strongly.

“(The Philippines is) the fastest growth in this part of the world in Southeast. We need infrastructure to support such a growth that’s at high level, that’s what driving us to really participate in both in infrastructure and energy,” he said in an interview after the conglomerate stockholders’ meeting Friday.

Francia said the conglomerate is embarking on four power plants –the South Luzon Thermal Energy Corp.’s Calaca thermal power plant, the North Luzon Renewable Energy Corp.’s 81-megawatt (MW) wind energy power plant in Ilocos Norte, the 18-MW expansion of Northwind project and GNPower Ltd. Co.’s coal-fired power plant.

“We have reached financial close and will be starting the construction soon of the GNPower Mindanao project. The biggest in our pipeline is another power plant in Bataan –that’s 2 x 600 MW (coal-fired) power plant,” he added.

With these projects, Francia said Ayala is on track at hitting a total of installed capacity of 1,000 megawatts by 2016.

He said the completion of more power projects in the pipeline will provide the conglomerate an additional 500 megawatts capacity.

“Across the country, we probably need around 600 to 700 megawatts of additional capacity every year… So we are hopeful that we always want to contribute meaningfully in terms of that overall development,” he said.

On boosting its transport infrastructure business, Francia further said the conglomerate is participating in the bidding for various public-private partnership (PPP) projects.

He said Ayala Corp. is bidding on the Light Rail Transit (LRT) Line 2 Operation and Maintenance Project, Manila Water Co. Inc. on the Bulacan Bulk Water project, Ayala Land Inc. on Laguna Lakeshore Expressway-Dike Project and Southwest Terminal of the Integrated Transport System (ITS) project.

“We are keen on rail projects. (Once) PNR (Philippine National Railways) bids out (these projects), we will take a serious look at that,” he added.

Francia said these power and transport infrastructure projects are expected to contribute to the conglomerate’s overall net income starting this year.

“ I think next year would be obviously supposedly a better year as these plants get into more steady state… Of these four plants, steady state would hopefully be achieved by 2017 (which is) also the expected commissioning of the GN Mindanao plant,” he said.

“So hopefully by 2018, these will contribute as well. As more projects reach financial close and start construction, hopefully that will paint a growth picture all the way to 2020,” he added.

Ayala chairman and chief executive officer Jaime Augusto Zobel de Ayala said the conglomerate earmarked Php185 billion in capital spending this year mainly to support the aggressive expansion plans of its real estate and telecommunications units as well as continued investments in power and infrastructure initiatives.