Aboitiz Power shuts down Aseagas plant

MANILA, Philippines — Aboitiz Power Corp. has decided to stop operating its biomass power plant in Batangas which is on an extended shutdown due to lack of feedstock.

In a disclosure to the Philippine Stock Exchange, AboitizPower said its wholly-owned subsidiary Aseagas Corp. will permanently cease operations.

Aseagas earlier suspended its commissioning due to the unavailability of organic effluent wastewater from its supplier, Absolut Distillers Inc.

The company also took the opportunity to assess the plant’s other issues, and after a full assessment, decided to make the plant shutdown permanent.

“Our top consideration now is to balance the interests of all our stakeholders, including that of Aseagas’ employees,” AboitizPower president and chief operating officer Antonio Moraza said.

Despite the shutdown of the Aseagas plant, Moraza said the group is still on track to add some 500 megawatts (MW) of attributable capacity, mainly from baseload and hydro power plants in 2018, pushing the company closer to its 2020 target of attaining 4,000-MW in net attributable capacity.

Toward the end of 2017, the company said it is giving itself until the end of the year to make make a final decision on its Aseagas biomass power plant facility in Batangas.

Aseagas recently prepaid its outstanding loan with the Development Bank of the Philippines (DBP) amounting to P2.368 billion.

On top of the loan, the company also invested equity of around P950 million for the biomass plant and has around P460 million in outstanding liabilities.

As a result of the closure, total value affected is estimated to be at P3.7 billion, which represents Aseagas invested equity of P3.45 billion and the company’s estimated remaining obligations of around P250 million.

The Aseagas plant is AboitizPower’s first biomass project, which was supposed to start commercially operating in the second quarter this year.

Earlier, company officials said Aseagas has been encountering issues in getting the plant out of commissioning phase since operating a biomass project is new territory for the Aboitiz Group.

Aseagas is a wholly-owned subsidiary of AboitizPower through Aboitiz Renewables Inc., its holding company for investments in renewable energy.