Aboitiz Power allots $150 million for Tiwi-Makban upgrade

MANILA, Philippines - Aboitiz Power Corp. (APC), the power generation arm of the Aboitiz Group, plans to spend some $150 million for the rehabilitation and upgrade of the 289-megawatt (MW) Tiwi and 458.53-MW Makban geothermal facilities in the next four to five years.

APC senior vice-president Luis Miguel Aboitiz, at the turnover ceremony of the Tiwi-Makban geothermal power plants, by PSALM to Aboitiz Power, said this budget is expected to cover the upgrading and drilling of some additional geothermal wells to improve the company’s capacity.

He said there are already ongoing drillings of new wells. “Including additional steam supply and drilling, that’s around $150 million over the next four to five years,” he said, adding that the existing power plants needed upgrading.

“The plants are 20 plus years old so we plan to increase [its capacity] from 462 MW to 517 MW in the next four years,” Aboitiz said.

President Arroyo witnessed the handing of the P8.2-billion check representing partial payment for the Tiwi-Makban power plants by Aboitiz to the Power Sector Assets and Liabilities Management Corp. (PSALM).

The Aboitiz Group won the Tiwi-Makban auction last July 2008 with a bid price of over $446.888 million.

The P8 billion will cover the 40 percent downpayment for the geothermal assets while P492 million will be for AP Renewables Corp. payment for land lease.

Located at the boundary of Bay and Calauan towns in Laguna and Sto. Tomas, Batangas the Tiwi-Makban plants – consist of Plants A and B with two 63-MW units each, Plant C with two 55-MW units, Plants D and E with two 20-MW units each, and a binary plant with five 3-MW and one 0.73-MW units.

The Aboitiz Group has been aggressively bidding for National Power Corp. (Napocor) assets.

The company is targeting to double its generating capacity to 1,161 MW from the current level of 578 MW by 2011. 

Upon closing of the Tiwi-Makban purchase, APC will have investments in generation capacity of 1,040 MW, 77 percent of which are powered from renewable sources of energy.

Within the two-year period, the company is also looking at the completion of the rehabilitation and expansion of the 75 MW Ambuklao-Binga plant. Once completed, the combined capacity is expected to expand by approximately 30 percent to 225 MW with a combined annual generation of approximately 760 gigawatthour (gWh). 

Starting August 2009, the company’s 42.5 MW Sibulan hydroelectric project in Davao del Sur will come on stream. 

The project entails the construction of two cascading hydropower generating facilities tapping the Sibulan and Baroring rivers.

In the first quarter of 2010, APC expects to put in commercial operation its 3x82 MW coal-fired power plant in Toledo City in Cebu.

APC is also looking at more possible acquisitions this year, in particular the contracts for the independent power producers’ administrators (IPPAs).

The IPP contracts that the company is eyeing include the Luzon hydro plants, Casecnan and the San Roque plants.

The company also plans to bid for the upcoming first batch of IPPAs to be privatized, Sual and Pagbilao.

The company is also interested to bid for the 600-MW Calaca plant and the Limay plant.

Meanwhile, Energy Secretary Angelo T. Reyes said the successful bidding and turnover of Tiwi-Makban is expected to “boost government’s campaign on renewable energy sources.” Geothermal is considered a renewable energy source.

For his part, PSALM president and CEO Jose C. Ibazeta said after the turnover of Tiwi-Makban, they already contributed a total of $1.3 billion to government coffers due to the successful sale of Napocor assets.