Aboitiz teams up with Norwegian firm to bid for hydropower projects in RP

Aboitiz Equity Ventures Inc., (AEV) the listed investment holding company of the Aboitiz family, is teaming up with Norwegian company SN Power Invest AS to jointly bid for and develop hydroelectric power projects in the Philippines.

SN Power is focused on the development, investment and operation of hydroelectric projects in Asia, Africa and Latin America.

In a disclosure to the Philippine Stock Exchange, AEV senior vice-president and chief financial officer Stephen Paradies said the partnership will leverage on the local hydropower experience of AEV and the international operating experience of SN Power.

Paradies said the partnership will also allow the companies to share resources and bid for more than one of the assets being privatized by the Power Sector Assets and Liabilities Management Corp (PSALM).

PSALM is bent on selling the National Power Corp.’s generating assets and use the proceeds to settle a portion of the state-owned power firm’s debt.

SN Power was established in 2002 by two partners Statkraft SF and the Norwegian Investment Fund for Developing Countries.

Statkraft is Europe’s second largest producer of hydroelectric power with ownership in more than 90 power plants with a total capacity of 12,000 megawatts (MW).

Norfund, on the other hand, is an investment fund established by the Norwegian government to invest in private enterprises in developing countries.

AEV, through its subsidiary Hedcor Inc., is the largest private mini-hydro developer in the Philippines with over 25 years of experience in the field and has control over P3.3 billion worth of hydropower generation assets.

SN Power’s vision is "to become a leading hydropower company in emerging markets, contributing to economic growth and sustainable development."

It hopes to achieve this through profitable development of greenfield projects and acquisition/upgrading of existing assets.

AEV has consolidated all its hydropower generating subsidiaries under Hedcor to cut costs and enhance efficiency.

With the merger, Hedcor will have control over generating assets and interests worth P3.3 billion upon completion of the consolidation.

Last year, the total revenues of the consolidated corporations amounted to P1.2 billion.

These assets include 19 hydropower plants with a total installed capacity of 113 MW. The plants supply clean energy to customers in Benguet, Ilocos Sur, Pampanga and Davao.

Also forming part of these assets are the four Talomo plants that were acquired and turned over to AEV by PSALM in January 2005.

AEV is building three new plants in the Visayas-Mindanao area estimated to cost between $300 million and $500 million. Among these include a 200-MW coal-fired plant in Cebu and two hydro power plants in Davao.

Funding may come from new borrowings or proceeds from the issuance of treasury shares.

The two new plants to be set up in Davao will have a combined capacity of 76 MW. Construction of the first plant, which shall have a capacity of 46 MW, will begin early next year.

For the Cebu coal power plant, AEV has invited Mirant Phils. Corp. and Korean Electric Philippines Co. (Kepco) to be its partners.

The plant is expected to be operational by 2008.