Aboitiz unit gets state loan for biogas venture

A subsidiary of Aboitiz Equity Ventures Inc (AEV), Aseagas Corp., is taking on a P2-billion loan from state-owned Development Bank of the Philippines to finance its maiden venture: biogas for the transportation sector.

In a disclosure to the Philippine Stock Exchange, AEV said Aseagas already signed a notes facility and security agreement with DBP “to finance the construction of Aseagas’ first biomass renewable energy plant to be located in Lian, Batangas.”

Aseagas officials earlier announced the construction of a $50-million (P2.15 billion) biogas plant in Batangas that would produce liquid biomethane meant for the transport sector.

They said the company would complete the biogas plant—the first in Asia and second in the world apart from existing one in the United Kingdom—by the end of 2015.

The plant can produce 9,000 metric tons of liquid bio-methane a year, to be sold as liquefied natural gas or LNG by end-2015.

Aseagas president and CEO Sabin M. Aboitiz said the prospective plant would be put up near industrial firms that could supply Aseagas with organic waste for a fee, such as the distillery of Absolut Distillers Inc. (ADI), a subsidiary of Tanduay Holdings Inc.

Initially, ADI will sell organic waste to Aseagas under a 25-year effluent waste supply agreement signed in September 2013.

Also, the biogas facility will be located near the port of Batangas, which the government is pushing as a cargo transport hub to ease congestion in Manila’s ports.

Construction of the biogas plant is set to start this month.

In marketing the biogas, Aseagas is set to offer financing options to fleet owners—a move seen to offer savings since Aseagas will be selling LNG fuel at a price cheaper than diesel.

Company COO Juan F. Alfonso said the supply agreement with ADI would provide Aseagas with a stable source of organic material during its 25-year renewable energy contract with the Department of Energy.

Waste supply agreements can also be formed with other sources such as agriculture firms offering farm waste and even landfill operators, the officials said.

As for potential clients apart from cargo transport companies serving the Batangas port, Aseagas can build a few LNG outlets in select industrial hubs such as Subic, where transport and logistics company fleets can avail of their fuel, Aboitiz said.

Aseagas can also build biogas plants in other parts of the Philippines and even in other countries in Asia using the same technology, Aboitiz said.

Aseagas is a joint venture formed in 2012 between Aboitiz Equity Ventures and Gazasia Ltd., a UK alternative fuel company, providing waste-to-fuel solutions.