Aboitiz Power pays full P12.12 billion for Tiwi-Makban

MANILA, Philippines - Aboitiz Power Corp. (APC) paid in full yesterday the P12.12-billion acquisition cost for the Tiwi-Makban geothermal facilities, the Power Sector Assets and Liabilities Management Corp. (PSALM) said.

The payment, which includes accrued interest, was made through APC’s wholly-owned subsidiary AP Renewables Inc. (APRI).

PSALM is the state entity overseeing the privatization of National Power Corp. (Napocor) assets, including the Tiwi-Makban geothermal complex.

The power plant package consists of the 289-megawatt Tiwi plants in Albay and the 458-MW Makban facilities in Laguna and Batangas.

The bid for both power facilities covers their generating assets, which were offered on an ”as is, where is” basis, structures and improvements, spare parts and general plant equipment.

APRI earlier advanced in May P8.29 billion representing the 40-percent downpayment to the purchase price stipulated in the Asset Purchase Agreement (APA) as a precondition to the turnover of the Tiwi-Makban geothermal facilities.

The 60 percent balance in the purchase price was supposed to be paid over a period of seven years in 14 equal semi-annual installments under the terms of the APA.

Earlier, APC said it plans to spend about $150 million for the rehabilitation and upgrade of the two geothermal power facilities over a four to five-year period.

APC senior vice-president Luis Miguel Aboitiz said this budget is expected to cover for 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 added there are some upgrading needed for the existing power plants.

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

APC won the Tiwi-Makban bidding on July 2008 with a bid price of $446.888 million.

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 by 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 hydropower plant.

Once completed, the combined capacity is expected to expand by approximately 30 percent to 225 MW with combined annual generation of approximately 760 gigawatthour (gWh).