Aboitiz to acquire state-owned power assets

MANILA, Philippines - Aboitiz Power Corp. (AP), one of the top power producers in the Philippines, is looking to increase its generating capacity by acquiring state-owned power assets.

Organic growth will still be pursued through new power plants and the expansion of existing facilities, its top executive said.

“We are interested in the privatization of some Power Sector Assets and Liabilities Management Corp. (PSALM) assets,” AP president and CEO Erramon Aboitiz told reporters.

“In fact, we have registered for Unified Leyte. We also registered for the Mindanao diesel barges,” Aboitiz said, adding that the company already submitted its letter of interest.

State-run PSALM will auction the output of the 640-megawatt (MW) Unified Leyte geothermal power plants in Leyte.

Last week, eight firms including AP subsidiary Therma Power Visayas Inc. signified interest to bid for the four power barges (PB) that will be auctioned off by the government in October.

PB 101, 102, 103 and 104 are nominal 32-MW barge-mounted bunker-fired diesel generating power stations that consist of four identical Hitachi-Sulzer diesel generator units rated at eight MW each. PBs 101 and 102 are currently stationed at Bo. Obrero in Iloilo City.  PBs 103 and 104 are moored in Estancia, Iloilo, and at the Holcim Compound, Davao City, respectively.

PSALM, formed by the Electric Power Industry Reform Act of 2001, is the state firm in charge of privatizing government power assets as well as managing National Power Corp.’s power plants and debt. It buys the fuel requirements of state-owned power assets while awaiting privatization.

Aboitiz said the company is planning to pay PSALM the $1-billion concession fee ahead of the 2026 deadline.

In terms of larges scale expansion, AP is focusing on building new power assets. To date,

In the first half, attributable net generation of AP rose five percent to 5,360 gigawatt-hours (gWh) from 5,096 gWh last year.

“Our program now is to build new capacity,” Aboitiz said.

For instance, AP subsidiary Therma South Inc. is putting up a 300-MW coal-fired power plant in Davao worth $720 million that will start operations in early 2015.

“There is also a 300-MW plant in Cebu and hopefully we can start that next year,” Aboitiz said.

AP is also planning to expand the Pagbilao power plant in Quezon province.

In March last year, TeaM Energy Philippines announced its partnership with the Aboitiz Group to expand 735-MW Pagbilao coal-fired power plant by another 400 MW at a cost of $600 million to $700 million.

“Of course we are doing a lot of small hydropower projects. We are also looking at and studying some geothermal sites,” Aboitiz said.