Aboitiz gets control of Magat power plant

By Paul Anthony A. Isla

Reporter

THE Power Sector Assets and Liabilities Management Corp. (Psalm) said Thursday it has formally turned over control of the 360-megawatt Magat Hydroelectric Power Plant to winning bidder SN Aboitiz Power Inc. (Snap) on Wednesday, and it has begun operations of the Isabela-based power facility. Psalm said the turnover was held after it received the $371-million upfront payment for the Magat power plant and 50 percent of the deferred payments, or about 70 percent of the full price of $530 million.  “Thank you for helping the government,” Psalm president Jose Ibazeta told Erramon Aboitiz, executive vice president of Aboitiz Equity Ventures, as they shook hands at the handover at Psalm’s main office in Makati City.  “We are very pleased to support the privatization program of the government,” responded Aboitiz. “This plant is very strategic for us. The purchase of Magat is a very important step in achieving our goals of building a renewable energy business.” Aboitiz pointed out that because of its large water storage, the plant is capable of providing ancillary services. He also noted plans of the Philippine Electricity Market Corp., operator of the Wholesale Electricity Spot Market, to establish a second market for ancillary services before the year ends. SN Aboitiz will participate in this market once it is established.  “We don’t think you could replicate this facility today and, if you did, it would be at a huge cost,” said Aboitiz.  Besides the certificate of closing and the legal opinion that both parties executed, Snap provided Psalm its bank certification—the most important document handed over during the signing rites also held at the Psalm office. The certification informed Psalm of the amount that the consortium had deposited in its bank for payment to Psalm.   Although the balance of $159 million is to be paid over seven years, Snap president Luis Miguel Aboitiz said the corporation is working on refinancing the loans of Snap with longer tenors and lower interest rates. “The financial markets are very liquid and we’re getting very attractive financing offers from local commercial banks.”  Aboitiz said that Snap with AEV remains interested in acquiring more power assets. It is particularly keen on participating in the public bidding for the Ambuklao-Binga power plant. “We’re just waiting for Psalm to make its move.” AEV is the country’s second largest power distributor, owning five distribution utilities, and is the pioneer in the development of mini-hydros.

 

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