Aboitiz Power acquires 34% stake in STEAG power plant for $92M

Aboitiz Power Corp. has completed its acquisition of a 34-percent stake in STEAG State Power Inc., which owns and operates a 232-megawatt coal-fired power plant in Misamis Oriental.

Aboitiz Power, the holding firm for the power generation and distribution assets of the Aboitiz family, won the auction for the 34-percent equity with its bid of $91.9 million last August.

STEAG is 55 percent owned by Evonik, Germany’s fifth largest power generator. Another 11 percent is owned by State Investment Trust.

STEAG built the plant at a cost of $305 million under a build-operate-transfer (BoT) scheme, entitling it to 25-year power purchase agreement (PPA) with the National Power Corp.

The plant was put into commercial operation in November 2006.

Aboitiz Power president and chief executive officer Erramon Aboitiz said their equity investment is very strategic for the company as it seeks to mitigate a shortage of power supply in Mindanao.

The STEAG Mindanao plant is the third coal-fired power plant designed, financed, built and operated by STEAG outside of Germany. It covers about 15 percent of the electricity needs of Mindanao, which has some 14 million residents.

Aboitiz Power’s distribution utilities in Mindanao include Davao Light & Power Co., the largest power distributor in Mindanao, and Cotabato Light & Power Co.

The company also operates a hydro power facility in Davao and has investments in various generation assets in Mindanao, which include Western Mindanao Power Corp. in Zamboanga and Southern Philippines Power Corp. in General Santos.

Its subsidiary Hedcor is building a 72-megawatt of run-of-river hydro in Davao, which is expected to be operational in 2009.