Is power producer AES Corp. selling its majority stakes in the 630-MW Masinloc Power Plant in Masinloc, Zambales?

By Patrick Roxas

According to a report published in the power philippines website last month, AES is thinking of giving up its 51 percent controlling interest in the Masinloc coal fired power asset.

AES acquired the majority shares of the coal-fired power plant in a $930 million bid in 2008.

Thailand’s Electricity Generating Public Co. Ltd. bought 41 percent of its stake in 2014 and the remaining 8 percent is owned by the World Bank’s International Finance Corp.

AES’ move reportedly made major local power utilities such as Manila Electric Co. (Meralco) and AboitizPower to also make plans of acquisition in the Masinloc unit.

Both have expressed strong interest and are already preparing to study their participation as soon as the sale is formally announced, the report said.

Ayala’s energy unit AC Energy Holdings Inc. was also reported to be contemplating to buy the AES asset but decided to review the controlling stake first before participating in the sale.

“The process has not started yet,” Meralco president Oscar Reyes has been quoted saying. “It’s up to them… but we have to do all the necessary due diligence.

“AES is an existing, operating generating company. In a sense, you already have something that is potentially cash and income accretive to the business.”

Meralco PowerGen (MGen), Meralco’s generator facility prior to the Retail Competition and Open Access regime, can greatly benefit in earning the Masinloc asset considering that it doesn’t have an existing power plant yet.

AboitizPower appears to be waiting as well for AES Corp. to issue a process letter as they have participated in a similar unit sale, specifically when the Masinloc plant was then operated by the national government, way back in late 2000.

The Masinloc Coal-Fired Thermal Power Plant is located at Barangay Bani in Masinloc, and takes up onshore and reclaimed areas and properties.

It utilizes refined coals from Australia, China, and Indonesia. It was previously owned by the National Power Corporation (NAPOCOR) but was privatized by an international bidding procedure under the Electric Power Industry Reform Act (EPIRA).

AES, through Masinloc Power Partners Co. Ltd., completed the $930 million purchase and transfer of assets of the 600 MW Masinloc Coal-Fired Thermal Power Plant.

The acquisition was a key component of AES’s strategy to invest in areas where there is a significant need for new capacity and offers the company an excellent entry point into the growing Philippine economy through one of the lowest cost base-load plants in the system.

The Masinloc project is a particularly attractive investment because the existing facility has the infrastructure in place to allow AES to add an additional 600 MW of generation capacity.

As it has done through similar acquisitions in other parts of the world, the company expects to improve the overall efficiency and output of the existing plant, providing more reliable energy to the Philippine market.

Originally constructed in 1998, the plant uses coal from a variety of sources in the Pacific Rim. Through this acquisition, AES now operates the Philippines’ first privatized thermal plant.

The Masinloc Power Partners Co. Ltd of AES owns the base-load pulverized coal-fired power plant. The plant consists of two 300 MW units, each with an identical drum type forced re-circulation boiler. The plant began operating in 1998.

During the 1980s and early 1990s, the Philippines’ power sector suffered major electricity supply shortages. In response to the shortages, the NAPOCOR invested substantially in costly fast-track diesel and oil-fired power plants, implemented new public sector generation projects including Masinloc, and completed 27 contracts for construction of independent power plants.

By 1994, the power supply crisis had receded. The subsequent increases in excess generation capacity rapidly undermined the finances of the power supply industry.

The government’s solution was to embark on an ambitious program of privatization and reform. The pivotal changes were initiated in 2001, when the government passed the EPIRA, which provided the basis for transforming the electricity sector from one with significant public sector ownership and operation of key components (generation and transmission) into one that is now largely privately owned and operated with significant and growing competition.

A complementary objective of the reforms was the privatization of state-owned generation assets to help establish several independent and competitive generators, and use the proceeds to reduce the Philippines’ national debt.

The 2001 act set ambitious targets for privatization of state-owned generation assets that envisioned the sale of 70% of the state’s power plants to the private sector by June 2004.

The act also provided for the creation of a competitive wholesale electricity spot market (WESM). By 2005, the program was clearly faltering, following the failure of initial attempts to sell two major power plants.

However, in 2006, the planned WESM commenced operations and in 2007, a second attempt to sell Masinloc, together with several existing power sales contracts between Masinloc and its customers, was successful.

Masinloc Power Partners Company Ltd. (MPPCL) won the tender at a price of $930 million. MPPCL’s ultimate parent was the global power company AES, based in the United States.

MPPCL subsequently gave the International Finance Corporation a mandate to raise the capital needed to finance the project. ADB agreed to help cofinance the project.

First Published: subicsun.com

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The Department of Environment and Natural Resources Region V (DENR-V) has again recognized AboitizPower RE company AP Renewables, Inc. (APRI) for its sustained commitment to helping protect the environment.

Aerial photo (courtesy of Gerhard Joren/ADB) of AboitizPower’s MakBan Geothermal Power Plant in Batangas, operated and managed by its subsidiary AP Renewables, Inc. (APRI)

APRI recently received the Special Environmental Achievement Award at the 17th Saringaya Awards, an annual recognition program of DENR-V, honoring individuals and organizations in the region that have championed environmental stewardship in their communities.
Launched in 2000, the Saringaya Awards was named after the Bicolano word masaringaya, which means green environment, abundance, health, and balanced ecology, and has since been considered as the region’s “highest environment award”.

Since 2012, APRI has been a consistent Saringaya awardee. This year, the company was commended for its notable initiatives such as the Development of Climate-resilient Mt. Malinao Biodiversity and Conservation Project (with Bicol University College of Agriculture and Forestry), Adopt-a-River Project (with DENR-EMB V), Rain Water Collector, Vermi-composting and Nursery Facility, and A-Park, a Biodiversity Enhancement Project of the Aboitiz Group.

APRI President and COO Felino M. Bernardo cited the local governments’ continued support for the company’s projects and corporate social responsibility (CSR) programs.
“Our initiatives would not be possible without the support of local governments and our host communities,” Bernardo said. “We value this recognition from DENR as much as we value our partnership with them, as well as other government organizations, with whom we continuously collaborate for projects that benefit people and the environment.”

Bernardo also said that the award reinforces AboitizPower and APRI’s commitment to producing reliable and reasonably priced power supply in a responsible manner. “This award solidifies AboitizPower and APRI’s efforts to protect the environment and the communities where we operate while we remain committed to providing reliable and reasonably priced power to the nation,” he said.

AboitizPower continuously expands it RE businesses as it strives for a balanced portfolio of both RE and conventional energy sources to ensure reliability and afforability of power supply for customers.

The company recently secured the approval of the local government council of La Trinidad, Benguet for its subsidiary Hedcor’s Bineng Combined Hydropower Project, which will triple its capacity from 5.48 MW to 19 MW upon target completion in 2019. Other RE projects of AboitizPower that are underway are the 69-MW Manolo Fortich and 8-MW Maris Canal run-of-river hydro projecs in Bukidon and Isabela, respectively, and its first biomass power plant through subsidiary Aseagas in Batangas. The company and its partners currently have a net sellable capacity of more than 1,200 MW from its RE portfolio of geothermal, hydro, and solar power plants all over the country.

The sustained growth of AboitizPower’s RE portfolio also attracted key players in various industries to switch to Cleanergy, its brand for clean and renewable energy. These include Nestle Philippines, Eton Properties, Philippine Spring Water Resources Inc., Draka, and The Net Group, among others.

First Published: subicnewslink.blogspot.com

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— The U.S. Embassy sponsored six Filipino maritime law enforcement experts to attend a curriculum development workshop on underwater crime scene investigation training in San Diego, California, from July 17 to 20, 2017. The workshop is part of a larger P25 million U.S. government initiative to strengthen underwater crime scene investigation training programs for Philippine maritime law enforcement agencies, through partnership with the Port of San Diego Harbor Police Department and the U.S. Department of State Bureau of International Narcotics and Law Enforcement (INL).

With the Naval Base Coronado in the background, a Port of San Diego Harbor Police Department patrol boat conducts a harbor patrol with representatives from the Philippine Coast Guard Special Operations Group, the Philippine National Police Maritime Group, and the Philippine Bureau of Fisheries and Aquatic Resources

Filipino experts from the Philippine Coast Guard, the Bureau of Fisheries and Aquatic Resources, and the Philippine National Police Maritime Group, met with U.S. counterparts, including representatives from the Port of San Diego Harbor Police dive team, U.S. Embassy Manila INL, and INL’s Office of Criminal Justice Assistance and Partnership, to develop a special diver training course for underwater search, crime scene, and disaster investigations.

The course aims to equip Philippine divers from all three participating agencies with a variety of skills, including detecting illegal drugs smuggled on the hull of vessels or dumped overboard for later retrieval. Once finalized, the course will be incorporated into the training academies of the three participating Philippine agencies.

Through the U.S. Embassy’s INL programs, the Philippine government builds more effective law enforcement institutions and justice systems by drawing on American expertise in combatting crime, corruption, and narcotics trafficking. The U.S. Department of State has more than 110 partners across the United States to facilitate training and exchanges with foreign countries, including with federal law enforcement agencies; state and local police and corrections departments; local and state courts; district attorney’s offices and public defenders; port authorities; and professional associations, academic institutions, and civil society organizations.

First Published: subicbaynews.net

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Officials from the Joint United States Military Assistance Group (JUSMAG) recently delivered 1,040 2.75” rocket motors and 992 2.75? rockets to the Philippine Air Force (PAF) through the Mutual Logistics Support Agreement (MLSA).

Members of both the U.S. and Philippine armies unload and inspect a delivery of 992 2.75 inch rockets from the U.S. to the Armed Forces of the Philippines (AFP) at Clark Air Base, Pampanga. This delivery is one of many recent deliveries from the U.S. through the Mutual Logistics Support Agreement (MLSA) that enhance the AFP’s counterterrorism capabilities and directly support AFP members engaged in current counterterrorism operations.

These timely transfers greatly enhance the Armed Forces of the Philippines’ (AFP) counterterrorism efforts. They are part of a series of upcoming transfers from the U.S. military to multiple branches of the AFP through both MLSA and the security assistance program. Through the MLSA, the AFP is able to receive select munitions and equipment from U.S. military stock in an accelerated process reserved for allies and close partners of the United States.

The munitions and weapons deliveries will enhance the AFP’s counterterrorism capabilities, and directly support AFP members actively engaged in counterterrorism operations in the southern Philippines, including Marawi. Upcoming weapons deliveries include 250 rocket-propelled grenade launchers and 1,000 M203 grenade launchers delivered to the Philippine Army through the security assistance program.

The United States is a proud and steadfast ally of the Philippines and will continue to provide support to the AFP’s long-term modernization goals and counterterrorism needs.

First Published: subicbaynews.net

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U.S. Ambassador to the Philippines Sung Y. Kim, joined by Deputy Commander, Pacific Command, Lt. Gen. Bryan Fenton, presented Secretary of National Defense Delfin N. Lorenzana with two new Cessna 208B aircraft during a transfer ceremony at Villamor Air Base, Pasay City on July 27. Chief of Staff of the Armed Forces of the Philippines (AFP) Gen. Eduardo Año and Commanding General of the Philippine Air Force (PAF) Lt. Gen. Edgar Fallorina also participated in the ceremony, along with representatives from the U.S. Embassy.

Chief of Staff of the Armed Forces of the Philippines General Eduardo Año, Secretary of National Defense Delfin Lorenzana, U.S. Ambassador to the Philippines Sung Y. Kim, and Secretary of Foreign Affairs Alan Peter Cayetano at the turnover and blessing ceremony for two new Cessna 208B aircraft from the U.S. to the Philippine Air Force at Villamor Air Base in Pasay City.

The two new aircraft, valued at Php 1.67 billion, were delivered to Lt. Gen. Fallorina, through the U.S. National Defense Authorization Act Building Partnership Capacity Program. This delivery is the latest donation from the United States government, which over the last five years has allocated more than Php15 billion of grant funding to provide the AFP with up-to-date equipment and training. The equipment transfers, training, and continued bilateral exercises demonstrate the commitment of the United States to work with the Philippines in building capabilities towards eradicating global terror networks.

Since 2007, representatives from the Joint United States Military Assistance Group (JUSMAG) in the Philippines have delivered and programmed more than Php7.4 billion worth of military equipment to the AFP to enhance counterterrorism capabilities. In addition, the AFP has procured small-arms weapons, maritime assault boats, vehicles, unmanned aerial systems, and personal protective equipment as part of the U.S. government’s security assistance programs.

The PAF’s 300th Air Intelligence and Security Group (300 AISG), based out of Edwin Andrews Air Base in Zamboanga will operate the two new C-208B aircraft. 300 AISG is the leading unit for air intelligence surveillance and reconnaissance operations for the Armed Forces of the Philippines (AFP).

The Cessna 208B aircraft will enhance the PAF’s counterterrorism capabilities, and help protect AFP members actively engaged in counterterrorism operations in the southern Philippines, to include Marawi. Equipped with advanced sensors, cameras and communications equipment, these aircraft will significantly enhance the ability of the AFP to locate terrorist groups operating in Mindanao and the Sulu Archipelago.

The United States, as a steadfast ally of the Philippines, continues to provide support to the AFP through both grant assistance and expedited sales of arms and munitions to support both long-term AFP modernization goals and urgent counterterrorism requirements.

First Published: subicbaynews.net

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