Aboitiz Power eyes takeover of Tiwi-Makban facilities

MANILA, Philippines - Aboitiz Power Corp., the power generation arm of the Aboitiz group, will likely start operating the 289-megawatt (MW) Tiwi and 458.53-MW Makban geothermal power facilities in the second quarter of this year.

Stephen G. Paredes, senior vice president and chief finance officer of Aboitiz Power’s parent firm Aboitiz Equity Ventures (AEV), said the power company has the 40-percent upfront payment for Tiwi-Makban to allow it to take over the facilities.

We already have the P8-billion cash ready by May this year,” Paredes said, adding that they are going to pay up the Power Sector Assets and Liabilities Management Corp. (PSALM) in three months time.

“We are putting now our organizational team and very, very soon-that’s in three months – we will take over Tiwi-Makban operation,” he said.

The remaining 60 percent, he said, would be paid on a staggered basis in seven years under the agreement with PSALM.

Aboitiz Power bagged the Tiwi-Makban package after submitting a bid of $446.88 million in July 2008.

Aboitiz Power recently issued P2.5-billion retail bonds to partially fund the acquisition of Tiwi-Makban.

Upon closing of the purchase, Aboitiz Power will have investments in generation facilities with a total generating capacity of 1,957 MW, more than 70 percent of which are powered by renewable sources of energy.

In April 2008, Aboitiz Power’s 50-percent owned Luzon Hydro Corp. (LHC) entered into a settlement deed with Transfield Philippines Inc. (TPI), the contractor for its 70-MW Bakun plant.

In May 2008, wholly-owned subsidiary Hedcor Sibulan obtained a P3.5-billion loan facility from a consortium of local banks.