Aboitiz Power acquires add’l stake in Subic Enerzone

Aboitiz Power Corp. (APC) has entered into an agreement to buy the 20 percent equity of Team Philippines Industrial Power II Corp. (formerly Mirant (Phils.) Industrial Power II Corp.) in Subic Enerzone Corp. (SEZ) for P92 million.

In a disclosure to the Philippine Stock Exchange (PSE), APC said together with the 35 percent equity of its subsidiary Davao Light and Power Co. Inc. in SEZ, the present acquisition makes SEZ 100-percent owned by the Aboitiz Group.

APC previously acquired a total of 25 percent equity in SEZ from San Fernando Electric Light and Power Co., Inc., Okeelanta Corp., Pampanga Sugar Development Corp. and Aboitiz Equity Ventures Inc. through a share-for-share swap. The share swap scheme is still pending before the Securities and Exchange Commission for approval.

SEZ operates the power distribution system of the Subic Bay Freeport Zone under a 25-year distribution management services agreement with the Subic Bay Metropolitan Authority (SBMA), which SEZ won through a competitive bidding in 2003.

APC is a wholly-owned subsidiary of Aboitiz Equity Ventures Inc. (AEV) and Taiwan Cogeneration International Corp. (TCIC).

APC said recently it plans to tap the incentives being offered by the government, through the Board of Investments, for its planned 300 megawatt (mw) coal-fired power plant at the Subic Bay Freeport Zone.

The proposed Subic Bay coal-fired power plant is expected to supply electricity to SBMA and other economic zones around the country. SBMA is expected to experience high growth in demand from new locators, including Korean shipbuilder Hanjin.

TCIC will supply the coal plant’s electricity output to SEZ, which was contracted to provide power distribution services to SBMA until 2028.

SEZ is a consortium composed of AEV, Davao Light & Power Co. (DLPC), Mirant Phils. and San Fernando Electric Light & Power Co.

TCIC, a subsidiary of Taiwan Power Corp., is engaged in the project planning, design, purchase, assembly, construction, construction management and financial planning of cogeneration systems, acquiring fuels and related businesses.

SBMA administrator Armand Arreza earlier said TCIC’s investment will lower the cost of power in the area.

According to Arreza, electricity cost will go down by at least P1 per kilowatt-hour. TCIC would be selling electricity at P3.50 per kwh, from the current P4.10 per kwh.