Aboitiz, Taiwanese firm ink deal for power plant

REPORT FROM BUSINESSWORLD Aboitiz Equity Ventures (AEV), the listed holding firm of the Aboitiz family, has tapped a Taiwanese power firm for its planned 300-megawatt coal-fired power plant in the Subic Bay Freeport Zone in Olongapo. AEV said that its unit Aboitiz Power Corp. entered into a joint venture agreement with Taiwan Cogeneration International Corp. to build and operate a coal-fired power plant in the Subic Bay Freeport Zone. Taiwan Cogeneration is a state-owned firm that designs, operates and invests in power plants and cogeneration facilities. "The proposed Subic Bay coal-fired power plant is expected to supply electricity to Subic Bay Metropolitan Authority (SBMA) and other economic zones around the country. Aboitiz Power and Taiwan have agreed to form a joint-venture company which will serve as vehicle for the implementation of the proposed Subic Bay coal-fired power plant," AEV corporate secretary Leah I. Geraldez told the Philippine Stock Exchange on Monday. The company declined to reveal investment figures but a rule-of-thumb in the power industry is that one megawatt requires an investment of at least $1 million. Going by this, Aboitiz Power will be spending at least $300 million for the 300-MW plant, an AEV official said. AEV said while there is no power shortage in Subic Bay, the 300-megawatt plant that it will construct will cover future power demand of the economic Zone. Aboitiz Power’s distribution utility Subic EnerZone Corporation manages the power distribution system of SBMA. The holding firm also said utilities adjacent to the Subic Freeport will benefit from the power generated by the plant. The proposed coal plant will help support the power needs of the economic zone. Environmentalists, however, opposed the construction of the plant, as they noted Subic Bay is home to over 70 species of fish, including varieties of reef fish. Environmental group Greenpeace said coal is a form of energy that pollutes comprehensively, from the time the coal is extracted to its transportation across the sea or land to the pollutants it pumps into the atmosphere. "Fly ash samples taken from coal-fired power plants in the Philippines and Thailand over the course of the last three years have shown the presence of hazardous substances such as mercury and arsenic," Greenpeace said in a statement. Aboitiz Equity, however, is pursuing the project as the company has been strengthening its presence in the power sector. Last week, the company disclosed that the group’s Hedcor Consortium, which is made up of its units Hedcor Sibulan, Inc. and Hedcor Tamugan, Inc. along with Philippine Hydropower Corp., bagged a power supply deal with Davao Light and Power Co., Inc. Davao Light is also an Aboitiz-owned firm. — Iris Cecilia C. Gonzales/BusinessWorld