Two of the country’s largest conglomerates are joining forces to augment the country’s power generation capacity.

Ayala Corporation, through its wholly-owned subsidiary, AC Energy Holdings, Inc. (AC Energy, formerly Michigan Power, Inc.), and PHINMA, Inc., through its energy arm, Trans-Asia Oil and Energy Development Corporation (Trans-Asia), have signed today a joint venture agreement for the construction and operation of a thermal power plant in Calaca, Batangas.

The joint venture company to be formed will be owned 50 percent by Trans-Asia and 50 percent by AC Energy.

The 135-megawatt power plant will employ the environment-friendly Circulating Fluidized Bed boiler technology. Total project cost may reach approximately P 12 billion and will be financed by a combination of debt and equity. The plant is expected to start commercial operations by mid 2014.

According to PHINMA president and Trans-Asia vice chairman Ramon R. Del Rosario, Jr., “We are glad to be partnering with the Ayala group in this joint venture project. We look forward to leveraging each other’s strengths in developing and running a modern and environment-friendly facility that will contribute to the country’s power supply generation through conventional source using clean technology.”

For his part, Ayala president and chief operating officer Fernando Zobel de Ayala said, “This project is part of our strategy to build a portfolio of power generation assets that combines conventional and renewable energy sources. This project will help contribute to building the much needed base load capacity to meet the growing demand for power in Luzon. This is simultaneous to our efforts to contribute in the development of alternative energy sources.”

Ayala, through AC Energy, recently formed several joint venture agreements to develop solar and mini-hydro power projects across various sites in the Philippines. It also recently acquired a 50 percent stake in Northwind Power that operates the wind farm in Bangui, Ilocos Norte.

Trans-Asia, through its wholly-owned subsidiary, Trans-Asia Renewable Energy Corporation (TAREC) has aggressively pursued the development of renewable energy and has been awarded service contracts with potential wind capacity of 350 MW, making it one of the largest wind developers in the country today.

ING Bank N.V. acted as financial advisor to Trans-Asia in the transaction.