Aboitiz solidifies position in local RE market with CBK complex win
Aboitiz Power Corp. (AP) is locking in its spot as a renewable energy (RE) leader, with a strong long-term growth profile following its winning P36.266-billion bid for the Caliraya-Botocan-Kalayaan (CBK) hydroelectric power plants in Laguna, analysts said.
Analysts interviewed by Inquirer said that the recent victory of the group—with one branding it as a “significant win” for Aboitiz—will further expand and diversify its power generation portfolio.
“This acquisition cements AP’s position as the largest hydropower operator in the Philippines, adding to AP’s renewable energy mix,” Peter Garnace, equity research analyst at Unicapital Securities Inc., said in a message on Saturday.
“Although we are not privy to the exact ownership split of Thunder Consortium, we view this acquisition as earnings accretive for AP, with strong potential to drive sustainable earnings growth in the coming years,” he added.
On Friday, state-led Power Sector Assets and Liabilities Management (Psalm) Corp. confirmed that Thunder Consortium—composed of Aboitiz Renewables, Inc., Sumitomo Corp. and Electric Power Development Co.—provided the highest offer for the 796.64-megawatt (MW) power plants.
This was way higher than the P19.616-billion offer of its sole competitor, FWKG Consortium, comprised of First Gen Prime Energy Corp. and Korea Water Resources Corp.
The CBK plants are considered crucial Luzon power assets.
However, since the complex is an old energy infrastructure, Juan Paolo Colet, managing director at China Bank Capital Corp., said that Aboitiz Power may get challenged in upgrading and optimizing the CBK complex.
He added that the facility would also compete against newer plants.
This was echoed by Garnace, saying: “Given that the CBK complex is among the oldest hydropower plants in the country and being acquired on an ‘as is, where is’ basis, the consortium could be exposed to unforeseen operational challenges and maintenance costs.”
But Colet said that while these risks are present, the consortium has the expertise and financial muscle to see the process through.
The CBK hydroelectric power facility is one of the power assets being sold by Psalm to settle all the liabilities and obligations it assumed from National Power Corp.
