KOREA Electric Power Corp. (KEPCO) targets to finalize the sale of two energy assets in the Philippines within the first semester of this year as shortlisted bidders are set to submit their final offers for these investments, which include a stake in a 200-megawatt (MW) power plant in Cebu.
In a statement on Wednesday, the South Korean state-owned energy group said the second round of the sale process of its two “non-core” assets has started.
“Since the distribution of a teaser in October, several domestic and foreign bidders expressed high interest in the assets and subsequently submitted preliminary bids,” KEPCO said.
It said shortlisted bidders are now undergoing due diligence and site visits. They are expected to submit final offers in the first quarter. The company said it aims to enter into a sale agreement within the first half.
The energy firm said that it will still be in the Philippines as it still has an existing investment in Solar Philippines Calatagan Corp.
“As the marketing process drew more than the expected interests, the potential sale process has gained further traction towards a successful closing,” KEPCO said.
Up for the sale is its 60% stake in a thermal power plant in Cebu, KEPCO SPC Power Corp. (KSPC), and its stake in listed firm SPC Power Corp. KEPCO in June 2022 appointed Samil PwC as its financial advisor for the sale.
KSPC is a joint venture between KEPCO Philippines Holdings, Inc. and SPC Power. It owns and operates the 200-MW circulating fluidized bed coal-fired power plant in Naga, Cebu.
“Since its operation in 2011, the plant has been supplying stable and efficient power to the Visayas region,” KEPCO said.
KEPCO Philippines Holdings also directly owns a 37.96% stake in SPC Power, it said, citing regulatory filings last year.
“Despite the worldwide ESG (environmental, social, and corporate governance) movement, the country’s rising electricity demands and reliance on coal, as power source, allowed for competitive bids,” KEPCO said.
The company said a key factor for the interest in the Cebu power plant is its technology, “regarded as the environmentally optimized combustion process among coal-fired power plants.”
It said the move to place the assets on sale aims to strengthen its commitment to carbon neutrality and to completely phase out coal by 2050. SPC Power earlier expressed interest in KEPCO’s stake and assets.
Meanwhile, KEPCO said that it is looking to invest in more renewable energy (RE) projects.
In 2022, the Department of Energy opened the Philippines’ RE sector to full foreign ownership, after Energy Secretary Raphael P.M. Lotilla signed a circular amending the implementing rules and regulations of the Renewable Energy Act of 2008 to allow 100% foreign capital in RE projects. — Ashley Erika O. Jose