ABOITIZ Power Corp. is in talks with two interested parties for the sale of the 8.8-megawatt (MW) biomass power plant in Lian, Batangas under subsidiary Aseagas Corp., which it wrote off for P3.7 billion in January this year.
“We’re talking to two interested parties — one local and one foreign,” Emmanuel V. Rubio, AboitizPower chief operating officer told reporters, adding that the foreign entity “would probably look into a partnership with a local.”
“I’m aiming before the close of 2018 for this option,” he said.
In January, the company announced that it would be permanently stopping the operations of the biomass power plant because of the lack of organic materials to produce electricity. It said its top consideration was to balance the interests of stakeholders, including those of Aseagas’ employees.
In December last year, AboitizPower said the plant had temporarily ceased operations because of the unavailability of organic effluent wastewater from its supplier Absolut Distillers, Inc. for conversion into clean and renewable energy.
Mr. Rubio said this time Absolut would again be the source of the feedstock for the power plant.
“At that time when we decided to close it, the feedstock is a bit erratic,” he said.
He said the company had been given assurance that there would be available feedstock from Absolut, which he said had expanded as well. He also said that the company had not closed its doors to a joint venture.
“But if we can sell it, if we can close it within the year, we’d do that. Pero (But) if not, we’ll be operating it again. We’ll see, we’re not closing [that] option,” he said.
Mr. Rubio declined to give details of the discussions nor the expected value of Aseagas because of a non-disclosure agreement, but said talks with the interested parties had advanced.
“We have the draft proposals and agreements. It’s being reviewed now. One is doing due diligence,” he said. “If they’re interested it will happen.”
He said the other option is to run the biomass plant again. “It’s always there. The plan is there,” he said.
The total value affected as a result of the plant’s closure included Aseagas’ invested equity of P3.45 billion and the company’s estimated remaining obligations of around P250 million.
AboitizPower acquired the biomass plant in July 2016, building up its renewable energy footprint, which covers large hydro, run-of-river hydro, geothermal and solar.
The deal was through Aboitiz Renewables, Inc., the listed company’s holding firm that houses its investments in renewable energy. AboitizPower acquired the Aseagas facility from parent firm Aboitiz Equity Ventures, Inc.
The acquisition, which marked AboitizPower’s entry into biomass technology, followed the company’s foray into solar power with the inauguration in April 2016 of San Carlos Sun Power, Inc.’s 59-MW peak solar power plant in Negros Occidental.
The biomass plant had been expected to start operating and delivering power to the Luzon grid before October 2016. It was supposed to power about 22,000 households while producing 33 tons per day of liquid carbon dioxide for the industrial and beverage industries.