AC Energy said the Philippine Competition Commission (PCC) has approved the shareholders’ agreement with ACE Endevor Inc. and Axia Power Holdings Philippines Corp. for the development of the 150 megawatts (MW) Ingrid diesel-fired power plant in Pililia, Rizal.
In a disclosure to the Philippine Stock Exchange yesterday (Dec. 2), the company said the PCC found the transaction “will not likely result in substantial lessening of competition.”
Under the agreement, Axia will acquire 50 percent of the shares and 50 percent of the economic rights in Ingrid Power Holdings Inc., the special purpose vehicle of the Ingrid project, while AC Energy will hold 50 percent shares and 45 percent of the economic rights, with ACE Endevor having a 5 percent economic rights share.
The PCC in its review said “no competition issue was raised since there remain competitive constraints from other players in the nationwide markets for the supply of electricity through bilateral contracts and through 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,” it said.
“Moreover, given the expected capacity of the Ingrid Project, the transaction does not significantly strengthen the ability or incentive of the parties to engage in input or customer foreclosure. The transaction also does not substantially increase the likelihood that the parties will engage in anti-competitive coordinated behavior with other firms in the relevant markets,” the PCC added.
As of January 2020, AC Energy has infused P570 million into Ingrid to fund the power plant that will provide ancillary services to the National Grid Corporation of the Philippines for peaking and reserve power to the Luzon grid that is expected to be operational by first quarter next year.
Ingrid will have a total subscribed capital of P1.97 billion.
Earlier, AC Energy announced it will start the construction of at least 1,500 MW worth of renewable energy capacity next year for projects that will be located in the Philippines, Australia, Vietnam and India.
Based on equity interest in power generation businesses, the entire AC Energy Group currently owns approximately 1,800 MW of generation capacity both in operations and under construction.