Ayala Group’s power generation arm ACEN Corp. is looking at capital expenditures (capex) of P72 billion this year to roll out its domestic and international renewable energy portfolio, company executives said Wednesday.
ACEN plans to finance its capex through a combination of internally-generated funds and loans. It allocated bulk of the capex amounting to P40 billion for its Philippine power business.
“We expect to continue our rapid expansion through 2024 as we work towards our aspiration to reach 20 gigawatts [GW] of renewables capacity by 2030,” ACEN president and chief executive Eric Francia said at the sidelines of the company’s annual stockholders meeting.
“The cash in our balance sheet is just under P40 billion. So that’s obviously going to fund a lot of these capex. Plus, additional financing from mostly from bilateral loans, whether it’s mostly at the project level, project finance from banks basically,” Francia said.
He said the company was looking at overall spending of $15 billion to realize the 20-GW target by 2030.
“We’re now roughly at 5 GW. So, to get to 20 GW, we need 15 GW. It’s around $1 million per megawatt. So that’s $15 billion. These are approximate figures. We expect roughly 60 percent of the funding to come from debt, whether it’s from banks or the debt capital markets. The 40 percent or roughly $6 billion from equity sources,” he said.
ACEN has over 3.3 GW of capacity in operations and under commissioning and about 1.5 GW of capacity under construction.
ACEN also signed agreements or won competitive tenders worth over 1 GW of capacity, which effectively surpasses the company’s goal of reaching 5 GW of renewables by 2025, or almost two years ahead of schedule.
Francia said the Philippines continues to be ACEN’s core market, accounting for about 40 percent of its generation portfolio.
“Our Philippine renewables output increased by 35 percent to 1,145 gigawatt-hours with the commissioning of new solar and wind farms…The significant increase in capacity resulted in a stronger net seller position for the Philippine business, amidst elevated electricity prices. This resulted in a robust financial performance,” he said.
Australia is ACEN’s largest market overseas, comprising around 20 percent of its generation portfolio capacity.
“We successfully commenced operations of our first project in Australia, the 521 MW New England Solar farm, one of the largest solar farms in Australia. Construction progress is also underway for the 520 MW Stubbo solar farm, which is around halfway to completion,” Francia said.
He said large construction projects in the Philippines, Australia and India faced execution challenges, mostly related to grid connection, extreme weather and right of way issues.
“However, many of these plants successfully commenced full operations by the end of 2023. In fact, six new projects worth 1.6 GW have recently started operations and are expected to deliver close to full year output in 2024,” he said.
