San Miguel selling 2 power plants to Meralco, Aboitiz unit for over $3b
By Alena Mae S. Flores – March 3, 2024, 9:50 pm
from manilastandard.net
Meralco PowerGen Corp. and Aboitiz Power Corp. said they are jointly investing in two of San Miguel Global Power Holdings Corp.’s gas-fired power plants in a deal which could be worth $3.3 billion.
The parties did not disclose the acquisition cost, but the 1,278-megawatt Ilijan power plant and a new 1,320-MW combined cycle power facility, including their terminal and land, were valued at $3.3 billion.
The deal also involves the acquisition of the liquefied natural gas (LNG) import and regasification terminal of Linseed Field Corp. This will be used to receive, store and process LNG fuel for the two power plants to fully integrate the local energy sector into the global natural gas supply chain.
The Ilijan power plant has been contributing to the grid using LNG as fuel, while the new 1,320-MW power plant under Excellent Energy Resources Inc. is expected to be completed by end-2024.
Officials of the three companies said the transaction is expected to help boost energy security and steer the country towards a cleaner, more sustainable future in line with the Marcos administration’s push for more natural gas in the country’s energy mix.
“This is a pathbreaking venture. Apart from transforming the energy landscape of the Philippines, this symbolizes a milestone alliance among major players in the energy industry towards a more sustainable future. We are thrilled to have such reliable partners as we lay the foundation for a brighter, greener future,” said MGen chairman Manuel Pangilinan in a statement Sunday.
The deal will substantially augment the country’s power supply with over 2,500 MW of generation capacity once fully operational, backed by advanced LNG storage and regasification capabilities.
The parties said this would not only meet the country’s energy requirements, but also support its environmental objectives by significantly lowering emissions.
“For the first time, three leading power companies are working together to secure our country’s energy needs while transitioning towards cleaner power sources. This represents a major leap forward for our energy future, ensuring not just reliability but also cost-efficient power for many Filipinos,” SMGP chairman and president Ramon Ang said.
“It’s for the country for us to help each other provide a stable and reliable power supply,” Ang said.
The deal also aligns with the push towards diversifying energy sources through the increased use of cleaner natural gas.
“Both LNG and renewables are needed to achieve a balanced energy mix and well-planned energy transition. Above all, this is a big win for the Philippines and the people. Economic development is impossible without energy security, and this investment is a definitive step forward in that direction,” said AboitizPower chairman Sabin Aboitiz.
UBS AG served as the financial adviser to MGen and AboitizPower on the transaction. The deal is also seen to make competitively priced and affordable power accessible to a broader base of Filipino consumers.
The collaboration among the three power companies represents a shared commitment to innovation, reliability, and environmental stewardship in the energy sector.
It also supports the Department of Energy’s (DoE) Philippine Energy Plan as the government identified LNG as crucial for energy sustainability and security, aiming to boost natural gas’ share in the power generation mix to 26 percent by 2040.
The parties said LNG offers significant environmental advantages over traditional fossil fuels contributing to reduced greenhouse gas emissions, combating climate change, improving air quality and enhancing public health, making it the ideal transition fuel to a renewable energy future.
The move also aligns with the Philippines’ own goal to significantly reduce greenhouse gas emissions by 70 percent by 2030.
