Aseagas Corp., a wholly-owned subsidiary of Aboitiz Power Corp., decided to divest out its biomass project in Lian, Batangas which it described as a failed venture.
“We are trying to sell it. That’s something we are trying to sell,” Aboitiz Power president Antonio Moraza said.
Aseagas shut down the 8.8-megawatt biomass power plant in Sitio Hermosa, Barangay Malaruhatan in January this year, after encountering technical problems. The biomass plant uses organic wastes as fuel.
“Keeping a long-term view in mind, we had to make the difficult decision to cease operations,” Moraza said.
Aboitiz Power said technical issues related to the consistency of the feedstock supply had affected the viability of the business as a whole.
“Everything, the whole thing. What are we gonna do with it? It’s a failed project,” Moraza said, when asked why the company decided to put the facility on sale.
Aseagas suspended the plant’s commissioning in November 2017 because of the unavailability of the supply of organic effluent wastewater from supplier Absolut Distillers Inc., while assessing whether it would make the shutdown permanent.
The plant was designed to convert the organic effluent wastewater from Absolut Distillery’s facility in Lian into power and other by-products. The biomass plant could supply electricity to 22,000 households.
It was supposed to avail of the feed-in tariff rate given to a renewable energy source under the Renewable Energy Act of 2001.
The Aboitiz Group spent around P3.7 billion for the project. Moraza said potential buyers might become interested in the project if it would be sold at a discount.
“Frankly, I don’t know but obviously they are buying it at a big discount. Maybe with the discount, they can make it viable,” Moraza said.
Aseagas earlier invested an equity of P3.45 billion in the project on top of the project’s remaining obligations of P250 million. Aseagas is a wholly-owned subsidiary of Aboitiz Power, through Aboitiz Renewables Inc., its holding company for renewable energy projects.
Aboitiz Renewables earlier acquired all equity interests of Aboitiz Equity Ventures Inc. in Aseagas for P605 million.
Aboitiz Power is the holding company of the Aboitiz Group’s investments in power generation, distribution and retail electricity services.