Aseagas Corp., a wholly-owned subsidiary of Aboitiz Power Corp., said Monday it decided to permanently cease the operations of its 8.8-megawatt biomass power plant in Lian, Batangas after encountering technical problems.
Aseagas suspended plant commissioning in November last year because of the unavailability of the supply of organic effluent wastewater from supplier Absolut Distillers Inc. and to assess whether to make the shutdown permanent.
“Our top consideration now is to balance the interests of all our stakeholders, including that of Aseagas’ employees,” Aboitiz Power president and chief operating officer Antonio Moraza said in statement.
Aseagas said it already prepaid its outstanding loan with the Development Bank of the Philippines amounting to P2.368 billion.
Total value affected by the plant closure is estimated at P3.7 billion, which represents Aseagas’ equity investment of P3.45 billion and the company’s remaining obligations of P250 million.
Moraza said despite these challenges, Aboitiz Power’s other projects were progressing as planned.
“About 500 MW of attributable capacity, mainly from baseload and hydropower plants, will come online in 2018. We are on track to meeting our 4,000-MW net attributable capacity target by 2020,” he said.
Aseagas is a wholly-owned subsidiary of Aboitiz Power, through Aboitiz Renewables Inc., its holding company for its investments in renewable energy.
Aboitiz Renewables previously acquired all of the equity interests of Aboitiz Equity Ventures Inc. in Aseagas for P605 million.
The biomass renewable energy uses organic wastes to produce energy. The facility was supposed to use the organic effluent from Absolut Distillery of Tanduay Distillers Inc. to produce electricity for 22,000 homes.
It was also designed to have other by-products such as fertilizer.
Aboitiz Power is the holding company of the Aboitiz Group’s investments in power generation, distribution and retail electricity services.