Aboitiz group interested in Leyte power contracts

The Aboitiz group is interested in bidding for the ownership rights to the Unified Leyte Geothermal Power Plants’ output as well as other assets of the Power Sector Assets and Liabilities Management Corporation (PSALM). The group is also in talks with PSALM on possibly prepaying the equivalent of some $1 billion in dues to help lessen the financial burden of the agency, Aboitiz Equity Ventures (AEV) president and CEO Erramon Aboitiz told reporters.

“We’re interested in the privatization of some of PSALM’s assets. In fact, we have registered for Unified Leyte [through subsidiary Aboitiz Power Renewables Inc.]. We also registered for the Mindanao and Iloilo diesel barges, so yes, we’re still open to privatization of PSALM assets,” Aboitiz said.

The state-run firm has started the process of selecting the IPPAs for the Unified Leyte geothermal facilities. Bidding is set to take place in October this year. At stake are rights to the “bulk energy” and smaller-sized output referred to as “strips of energy,” for which any qualified company can bid. As such, the sale structure of the Unified Leyte IPPA encourages diversification in the market. Lopez-led EDC operates the said steam plants whose output has been contracted by the government until 2025.

On the power barges, PSALM—which manages the supply of electricity from the government’s remaining power generators—bared that there were eight interested parties in the tender. Industry observers said the coming re-bidding (two earlier tenders failed due to the lack of competitive bids) may be more interesting to investors this time around because PSALM no longer requires potential winners to move the barges to Mindanao. Having to move the barges increases the cost for potential investors.