Philippines’ conglomerate Ayala to divest from coal by 2030

Lumps of coal hold a fire. Photo: Thomas Q

Ayala Corp., the Philippines’ oldest conglomerate, aims to fully divest from coal by 2030, a rare rebuke of the fuel in a region where its use is expected to grow.

Ayala’s power-generation unit, AC Energy Philippines Inc., will also boost investments in renewable generation as it transitions to a low-carbon portfolio, President Eric Francia said in a live-streamed annual stockholders meeting in Manila on Monday.

The company will “now focus on renewable investments and we will not be making additional investments in coal plants,” Francia said. However, it remains open to natural gas- or diesel-fired power “that complement our renewable assets and developments.”

The company joins a growing chorus of commitments by conglomerates, banks and governments to move away from coal, the most widely used and most-polluting fossil fuel for power generation. Southeast Asia is one of the last remaining growth markets for the fuel, as it’s seen as a cheap and reliable electricity source for rapidly developing economies.

Ayala owns shares in two coal-fired power plants and a third that’s under construction. It plans to accelerate its transition away from coal as fast as possible, but needs to continue to serve its customers with reliable power as it builds up renewable capacity, an outside spokeswoman said by email.

The company last year sold its stake in a 552-megawatt coal power plant in Kauswagan in the province of Lanao del Norte. In 2018 it sold a 60% stake of its thermal power unit, which owns a 632-megawatt plant in Bataan, and is building a 1.3-gigawatt plant, also in Bataan. It also owns a 35% stake in a 244-megawatt plant in South Luzon.

AC Energy plans to grow its attributable capacity to about 1,500 megawatts this year, from 1,100 megawatts in the first quarter, Chairman Fernando Zobel de Ayala said during the event Monday. Within that portfolio, the company aims to expand the share of renewables this year to 50%, from 44% in the first quarter, he said.

A lockdown across the Philippines’ main island of Luzon from mid-March has caused power demand to decline by as much as 40% as most industries and businesses are put on hold, reducing uptake volumes for AC Energy, Francia said. So far, the company’s renewable projects have been mostly unaffected by coronavirus-related lockdowns as most of them are in the engineering, design and procurement phase, according to the spokeswoman.

Bloomberg

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.