January 16, 2018
ABOITIZ POWER Corp.
(AboitizPower) is taking a hit of P3.7 billion as it permanently stopped the
operations of a biomass power plant because of the lack of organic materials to
produce electricity.
“Our top consideration
now is to balance the interests of all our stakeholders, including that of Aseagas’
employees,” said AboitizPower President and Chief Operating Officer Antonio R.
Moraza in a statement on Monday.
AboitizPower
in November temporarily halted operations of its 8.8-megawatt (MW) power plant
in Lian, Batangas under its unit Aseagas Corp. because of the unavailability of
organic effluent wastewater from its supplier, Absolut Distillers, Inc.
“Total value affected
as a result of the closure is estimated to be at P3.7 billion, which represents
Aseagas’ invested equity of P3.45 billion and the company’s estimated remaining
obligations of around P250 million,” AboitizPower said.
Mr. Moraza warned last
month that a write-off was a possibility.
“The company also took
the opportunity to assess the plant’s other issues, and after a full assessment
decided to make the plant shutdown permanent,” the company said yesterday.
Ahead of
the permanent closure, Aseagas had prepaid an outstanding P2.368-billion loan
with the Development Bank of the Philippines (DBP). The company had invested
equity of around P950 million for the biomass plant and has around P460 million
in outstanding liabilities aside from the DBP loan, AboitizPower had said.
Mr. Moraza gave his
assurance that AboitizPower remained on track to add around 500 MW, mainly from
baseload and hydropower plants in 2018, moving the company closer to its 2020
target of 4,000-MW net attributable capacity.
AboitizPower
acquired the biomass plant in July 2016, as it expanded 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 was
expected to start operating and delivering power to the Luzon grid before
October 2016.
The facility was meant
to use and convert the organic effluent of Absolut Distillery into clean and
renewable energy. 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.
On Monday, shares in
AboitizPower rose by P1 or 2.50% to close at P41 each. — Victor V. Saulon
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