A Joint Venture (JV) has been approved by THE Philippine Competition Commission (PCC) between Ayala-led AC Energy Philippines, Inc. (ACEPH) and Japan-based Marubeni Corp. (Philippina) which is preparing to develop a diesel power plant in Rizal.
ACEPH advised on Wednesday’s stock exchange that the PCC said the company “would not necessarily contribute to substantially diminished competition” and would not intend to take further action on the transaction.”
In the Decision of 24 November, PCC said that other electricity players have a competitive constraint through bilateral contracts and a wholesale electricity sector (WESM).
“Bilateral contracts set a fixed supply of power to pre-identified customers generated by the scheme, while WESM’s power offer legislation denies any space for the excess power to be tricked for benefit,” the commission says.
“This joint venture advances the strategic goal of the organization to become the country’s AC Energy Group development vehicle,” said ACEPH.
“The company will have the opportunity to build a greenfield project, in collaboration with Axia, that has a broad range of expertise in the local and international electricity sectors,” she added.
ACEPH entered into a July agreement between Axia Power Holdings Philippines Corp. and its owners to purchase half of the two shares and economic rights for its 150-megawatt Ingrid diesel-fueled power plant project in Ingrid Power Holdings, Inc., corporate vehicle Ayala in Rizal.
It also agreed to provide ACE Endevor, Inc., one of its subsidiaries, with 5% of the project economic rights while the company will retain the remaining 50% of the shares and 45% of economic rights.
Rizal will provide the Luzon grid with peak and reserve capacity. In the first quarter of 2021 it is projected to be online.
The Ayalas and Marubeni units managed South Luzon Thermal Energy Corp. coal-fired power stations in Batangas in Batangas before AC Energy acquired Axia’s interest in this project in November 2019.
ACEPH, formerly Phinma Energy Corp., purchased AC Energy Inc.’s ACE Endevor, then AC Energy Growth, Inc. and Ingrid Power share-swap agreements in October last year. In December 2019, the listed energy firm infused Ingrid with P570 million to build the power generator in question.