MANILA, Philippines - At an acquisition cost of $30 million for the shareholdings of its Australian partner, Aboitiz Power Corporation (APC) can assume full ownership of Luzon Hydro Corporation (LHC), the entity which owns and operates the 70-megawatt Bakun hydropower facility in Ilocos Sur.
The company, in a disclosure to the Philippine Stock Exchange, described the transaction which has been initially sealed through a memorandum of agreement (MoA), as part of a "restructuring process" for the operations of the facility.
The deal with its partner Pacific Hydro Pty. Ltd. of Australia will be concluded upon "fulfillment of certain conditions in the MoA." The Australian firm holds 50 percent equity in LHC.
AP explained that the acquisition will allow it "to capitalize on the operating synergies gained" by combining Bakun Hydro with the 10 other small to medium hydro power plants it also owns and operates in Northern Luzon - these having aggregate capacity of 34MW.
AP president and chief executive officer Erramon I. Aboitiz explained that the goal at obtaining full ownership of the Bakun facility "is consistent with our strategy of increasing the mix of viable renewable energy in AboitizPower's generation portfolio."
Beyond integration of the Bakun plant's operations to the other facilities proximate to it, the company is expecting to gain pluses that may extend to its other facilities in Northern Luzon - including its 360-megawatt Magat plant in Isabela and the 175-MW Ambuklao-Binga hydropower complex in Benguet.
The Bakun facility was developed by AP's subsidiary Hedcor and its Aussie partner Pacific Hydro in 1996. Its capacity was committed to the National Power Corporation under a 25-year power purchase agreement (PPA) as sealed in 2001.
So far, it has been the Aboitiz conglomerate's first biggest power facility prior to its acquisition of more assets through NPC's privatization.
It must be noted that the Aboitiz group has been among the most vigorous participant in many of the auctions of the NPC assets.
With the capacity it cornered, it was able to grow its generation portfolio to become the country's third largest power generator.
The company is also engaged in the distribution segment of the power industry. Even with the scale of its capacity at present, the AP group is still keenly seeking for new opportunities to expand its hold in the market.
