Recently, PSALM (Power Sector Assets & Liabilities Management Corp.), the arm of the Philippine government in the privatization of its power-generation facilities, bid out the Tiwi and Mak-Bak (Makiling-Banahaw) geothermal power plants. The power firm Abolitiz Power Corporation (APC) won the bidding by submitting the highest bid of $446.88M for the two geothermal plants, beating the Lopez-controlled First Luzon Geothermal Energy Corporation’s bid by nearly $80M.
The Tiwi Geothermal Plant has an installed production capacity of 289 megawatts (MW) and it is the first geothermal power plant in Bicol. It is situated on the northeast corner of Mount Malinao, an active volcano, and its turbines are located in the barrio of Cale, in the town of Tiwi, the northwesternmost town of Albay. Bicol’s other geothermal plant is the Bacon-Manito Geothermal Plant which is located on the boundary of Albay and Sorsogon between the former town of Bacon in Sorsogon and the southeasternmost town of Albay which is Manito. It is situated on the Pocdol volcanic range which divides Sorsogon from Albay.
Aboitiz Power Corporation’s buy-out of the Philippine government’s stake in the Tiwi Geothermal Plant marks the entry of the Aboitiz group, which is based in Cebu, to Bicol. The Aboitiz group has been on the foray lately in acquiring power plants all over the Philippines, marking its shift in its core business focus. To fuel this shift, their holding company, the Aboitiz Equity Ventures (AEV) recently sold Aboitiz Transport System (ATS) lock, stock and barrel to a Netherlands-based Kuwaiti group for $100M. ATS controls the country’s biggest shipping company, the SuperFerry and it also controls SuperCat, Cebu Ferries and the express courier company 2GO.
The Aboitiz group has long been in the power business. It could be said that it is the Meralco of the South (the Visayas-Mindanao areas) though it would probably resent the term. AEV controls the electricity distribution companies in the metropolitan areas of Cebu, Davao, Cagayan de Oro and Iligan.
As with new entries in the region, Bicol will again hope that the group will contribute to the development of Bicol and not just take profits out. The Aboitiz group certain can, if it can be persuaded. It certainly has the capability having presence in banking (Union Bank), food (flour manufacturing), marine (shipbuilding, maintenance and management), real estate, construction, transportation aside from power (generation and distribution).