Korea Electric Power Corp., a South Korean state-owned energy generation group, said Wednesday it is in the second round of the sale process for its interest in a coal-fired power plant in Cebu and stake in local firm SPC Power Corp.
KEPCO Philippines Holdings Inc. owns a 60-percent stake in KEPCO SPC Power Corp., the project company that owns and operates a 200-megawatt circulating fluidized bed coal-fired power plant in Naga, Cebu. KPHI also has a 37.96-interest in SPC Power Corp., based on the latter’s latest regulatory filings.
KEPCO said the move aimed to strengthen its commitment to carbon neutrality and its plan for a complete coal phase-out by 2050.
The Cebu coal plant has been supplying stable and efficient power to the Visayas region since its operation in 2011.
KPHI said it would continue to operate in the Philippines as the company has an existing investment in Solar Phils. Calatagan Corp. and is looking to invest more in renewable energy.
“Since the distribution of a teaser in October, several domestic and foreign bidders expressed high interest in the assets and subsequently submitted preliminary bids,” KEPCO said in a statement. It said among the interested bidders is SPC.
“Despite the worldwide ESG movement, the country’s rising electricity demands and reliance on coal as power source, allowed for competitive bids,” the company said.
KEPCO appointed Samil PwC as its financial advisor for the sale of its 60-percent stake in the Cebu coal plant and its stake in SPC in June 2022.
It said the Cebu plant’s circulating fluidized bed combustion technology, regarded as the environmentally-optimized combustion process among coal-fired power plants, was the critical factor for the interest from the investors’ perspective.
KEPCO said shortlisted bidders invited to the second round were expected to submit final offers by the first quarter. The bidders are undergoing due diligence and site visits.
KEPCO said it expected to sign an agreement with the winning bidder within the first half of 2023. “As the marketing process drew more than the expected interests, the potential sale process has gained further traction towards a successful closing,” the company said.
KEPCO and its six generation subsidiaries in November 2021 declared a vision for carbon neutrality by 2050.
It said the declaration showed KEPCO group’s strong commitment to fulfill their responsibility for carbon neutrality and turn it into a new opportunity.
‘Zero for Green’, KEPCO group’s vision for carbon neutrality, represents ‘zero emission’, ‘reliable energy’ and ‘on time’. Its goal is to reach net-zero carbon emission from power generation by transitioning into carbon-free generation sources including renewable and hydrogen energy.