Aboitiz Power prepared to take over power plants in Albay, Laguna

MANILA, Philippines - Aboitiz Power Corp. (APC) announced it is prepared to take over two power plants, Tiwi in Albay and MakBan along the border of Laguna and Batangas. APC, the Aboitiz group’s holding company for power generation and distribution, said that it has P8 billion on hand to pay for the two plants, comprising 40 percent of the total. The remaining 60 percent will be settled in seven years, Stephen G. Paredes, senior vice president and chief finance officer of Aboitiz Equity Ventures (AEV) said. AEV is the Aboitiz group’s holding and management company. The company can already run and manage the operations of the 289 megawatt (mW) Tiwi plant and the 458.53 mW facility in Laguna and Batangas. In July last year, APC was declared the winning operator of the two geothermal facilities after it submitted a $446.888 million bid. To attract investors, the Power Sector Assets and Liabilities Management Corp. (Psalm) has attached a 400 mW supply contract. Although the facilities have certain supply issues, the company continued to be interested in acquiring the plants since these would increase their capacities, Luis Miguel Aboitiz, APC’s senior vice-president for power generation group earlier said. These issues include the existing steam supply contracts that the National Power Corp. (Napocor) – the plants’ previous owner – entered into with a similar facility managed by Chevron. Both facilities also need to secure approval from the joint congressional power commission (JCPC) for its geothermal supply contract. Aboitiz added that the company will renegotiate its arrangement with Chevron. “The steam supply contract is very complicated...it was link to the price of coal. As coal goes higher and higher the more it became the less competitive plant, so the contract has to be renegotiated," he said. Shares of APC fell P0.10 to P4.45 during Wednesday’s trading at the Philippine Stock Exchange. - GMANews.TV