THE Philippine Competition Commission (PCC) has approved the joint venture (JV) between Ayala-led AC Energy Philippines, Inc. (ACEPH) and the Philippine energy unit of Japan-based Marubeni Corp. that is looking to build a diesel-fired plant in Rizal.
ACEPH told the stock exchange on Wednesday that the PCC said the venture would “not likely result in substantial lessening of competition” and it “would resolve to take no further action with respect to the transaction.”
In the Nov. 24 decision, PCC said that there are competitive restraints from other electricity players through bilateral contracts and the Wholesale Electricity Spot Market (WESM).
“Bilateral contracts set fixed power supply generated by the project to pre-identified clients, while the regulation of the power bids in WESM disallows any room for the plant’s excess power to be rigged for profit,” the commission said.
“This joint venture supports the company’s strategic objective to be the growth platform of the AC Energy Group in the country,” ACEPH said.
“The company will have the opportunity to develop a greenfield project which will provide peaking and reserve power in partnership with Axia, which has extensive experience in the local and international power sector,” it added.
ACEPH in July signed a shareholders’ deal with Axia Power Holdings Philippines Corp., which will buy half of both shares and economic rights in Ingrid Power Holdings, Inc., the Ayala unit’s corporate vehicle for the 150-megawatt Ingrid diesel-fueled power plant project in Pililla, Rizal.
It also agreed to provide 5% of the economic rights in the project to ACE Endevor, Inc., one of its subsidiaries, while the company will hold the remaining 50% of the shares and 45% of the economic rights.
The Rizal plant will supply peaking and reserve power to the Luzon grid. It is expected to go online in the first quarter of 2021.
The Ayalas and the Marubeni unit had jointly run the coal-fired power plants of South Luzon Thermal Energy Corp. in Batangas until AC Energy bought Axia’s stake in the project in November 2019.
In October last year, ACEPH, formerly Phinma Energy Corp., acquired the shares of AC Energy, Inc. in ACE Endevor, which is then AC Energy Development, Inc., and Ingrid Power, in a share-swap agreement. In December 2019, the listed energy company infused P570 million into Ingrid for the construction of the said power generator.
ACEPH shares closed at P6.23 apiece on Wednesday, down 13 centavos or 2.04%. — Jenina P. Ibañez with a report from A.Y. Yang