Aboitiz, SN Power look to expand in Southeast Asia
ABOITIZ POWER Corp. is partnering with Norway’s SN Power AS for potential hydropower projects in Myanmar and Indonesia as the company expands outside the Philippines for opportunities in power generation, its president said.
“We’re partnering with our partner in Magat, with SN Power, in Myanmar and Indonesia,” Antonio R. Moraza, AboitizPower president and chief operating officer, told reporters on Wednesday. “We’re still looking at hydro potential in Indonesia and now we’re looking at Myanmar too.”
Indonesia is the first Asian country that AboitizPower has focused on, as it had entered into an agreement with SN Power and PT Energi Infranusantara in September 2015 to participate in the feasibility studies for the exploration and development of a potential 127-megawatt ( MW) hydropower generation project along the Lariang River in Central Sulawesi, Indonesia.
A wholly owned unit Singapore-based AboitizPower International Pte. Ltd. had entered into an agreement with PT Medco Power Indonesia to explore a potential a two-unit 55-MW greenfield geothermal plant in East Java Province, Indonesia.
But on Jan. 31, 2017, after reviewing its overall capital commitments, AboitizPower decided to exit from the geothermal exploration and development project and allow PT Medco to proceed with the project.
“We’re looking. We’re studying. We’re looking at the permits. So it’s progressing. Hydro development is long gestation — seven, eight, nine years,” he said. “So that’s definitely patient money.”
Mr. Moraza said the company was looking at a large hydropower project in Myanmar that runs “several hundreds” in megawatts.
The projects in the two countries will have large water impounding facilities, he added.
“In Indonesia, it’s huge. Indonesia has the potential of 400 or 500 MW if you cascade it,” he said. “We’re still looking. The size is yet to be determined exactly.”
Mr. Moraza said the company was focusing on hydro projects because of SN Power’s expertise in the technology.
“They have over 15,000 MW of hydro in Norway. So these guys really know what they’re doing,” he said.
SN Power and AboitizPower unit AP Renewables, Inc. teamed up to form SN Aboitiz Power-Magat, Inc., the joint venture that won the bid in December 2006 for the 360-MW Magat hydroelectric power plant, which was previously under state agency Power Sector Assets and Liabilities Management Corp. The Magat plant, which is at the border of Ramon, Isabela province and Alfonso Lista, Ifugao in northern Luzon, was completed in 1983.
Mr. Moraza said the company was always on the lookout for potential power projects although he had not come across any geothermal ventures after the company lost in the bidding for Chevron Corp.’s assets in the Philippines and Indonesia.
“But our experience with geothermal... I think we’ve come to realize that it’s riskier than we thought,” he said.
AboitizPower’s expansion is largely prompted by its goal of increasing its generating capacity to 4,000 MW by 2020. It has a number of projects that will come on stream within the year such as the 69-MW Manolo Fortich hydro power plant in Bukidnon; the 8.5-MW Maris Canal hydro project in Isabela; 340-MW coal-fired in Cebu; the 400-MW expansion of a baseload plant in Quezon; and the 8.8-MW biomass power plant in Batangas.
The company also has a stake in a 600-MW coal-fired plant being developed in Zambales, which is scheduled for commercial operation in 2019.
In the Philippines, Mr. Moraza said the company’s unit Hedcor, Inc. was studying two run-of-river hydropower project in northern Philippines with a potential capacity of around 70 MW. He placed the cost of building a hydro project at $44 million, adding it would take around six years to complete this.
On Thursday, shares in AboitizPower were trading higher by 0.93% to P43.50 each.