Conglomerate San Miguel Corp. expressed interest in the power assets of American company AES Corp. in the Philippines worth $1 billion, a top executive said Monday.
“Yes, [we are interested in] Masinloc…We are joining,” San Miguel president Ramon Ang said, referring to Masinloc coal-fired power plant.
San Miguel is one of the country’s most aggressive players in the power industry. The company along with 15 to 20 local and foreign groups were looking at the sale of AES assets which would likely be completed this year.
Industry players said the transaction was expected to cost $1 billion. AES is selling a 51-percent stake in Masinloc Power Partners Co. Ltd., which owns the 630-megawatt Masinloc coal-fired power plant in Zambales province and the 335-MW expansion of the facility due for completion in 2019.
AES sold its 45-percent interest in Masin-AES Pte. Ltd., a wholly-owned subsidiary, to Electricity Generating Public Co. Ltd. of Thailand for $453 million in September 2014.
The sale included indirect stakes in the 630-MW Masinloc coal plant, expansion of the existing Masinloc facility and approximately 60 MW of potential energy storage projects in advanced development.
AES acquired the Masinloc coal plant from the government in 2008 for $930 million. The plant began operating in 1998 and consists of two 300-MW units that can utilize coal from different sources.
Ang earlier said the company would participate in any state-owned asset up for bidding as a part of its support to the government.
Ang, however, said last week the government should veer away from turning off investors by changing contracts in the middle of the game.
He said San Miguel-controlled South Premiere Power Corp. had been religiously paying the government its independent power producer fees for the 1,200-MW Ilijan natural gas plant in Batangas amounting to P237 billion as of August.
South Premiere, which manages the contract of Ilijan natural gas plant in Batangas as its independent power producer administrator, is embroiled in a dispute with Power Sector Assets and Liabilities Management Corp. over the computation of generation payments.
“Honor the contract. We have paid P237 billion in various fees as of August. Your claim to add P10 billion because of the price spike [in November to December 2013], that’s what you call changing the contract again. Respect the rule of law,” SPPC president and chief executive Ramon Ang said.
SPPC reacted to the statement of Energy Department to honor its contractual obligation to the government as the administrator of the power plant.
Records showed SPPC paid PSALM P187 billion in energy fees and P51 billion in capacity fees.
Ang said that by the time the agreement expired in 2022, SPPC would have paid PSALM a total of P384 billion, representing P287 billion in energy fees and P97 billion in capacity fees, which effectively would be the payment for the 20-year-old power plant.
Ang said a brand new plant with the same capacity could be built for less. “We have been faithfully paying them,” Ang said.