Aboitiz Power invests $220M in Vietnam coal power plant
AboitizPower Corp. is bringing its expansion drive abroad with a $220-million investment to acquire a 25-percent interest in a Vietnamese firm that operates a 1,320-megawatt coal-fired power facility.
The equity stake in Van Phong Power Co. Limited (VPCL) would be purchased from Sumitomo Corp., the energy giant said in a disclosure on Thursday.
The plant, which began its commercial operations in January 2024, has an existing 25-year power purchase deal with Vietnam’s national utility, Vietnam Electricity.
It said the Van Phong 1 coal-fired power plant has the capacity to cover about 4 percent of Vietnam’s annual gross power generation. The facility is also considered the largest foreign-invested project in the Van Phong special economic zone.
Chaising sustainable returns
“This marks a pivotal moment in AboitizPower’s history as it represents the company’s first significant investment outside of the Philippines,” the company said in a separate statement.
“With this venture, AboitizPower remains on track to deliver sustainable returns to its shareholders, maintaining a well-balanced portfolio of energy technologies. This investment is in parallel with our renewable investment program …,” it added.
Sumitomo, one of Japan’s conglomerate titans, has already signed the necessary agreements linked to Aboitiz Power’s acquisition. But the firm said the transaction still needs to secure regulatory approvals.
Once finalized, the Japanese group will continue to hold the majority stake in VPCL.
In May, Sumitomo disclosed that it would cut its equity interest in the coal plant, making VPCL an equity-method affiliate.
The Japanese company assured the public and investors that it would “continue to provide stable energy supply that is essential for the economic and industrial development of local communities.”
Japanese partner
Aside from energy, Sumitomo’s empire covers transportation, automotive, urban development, media and digital, steel, lifestyle business, mineral resources and chemical solutions.
On Wednesday, Aboitiz Power said its core net income had dropped by 15 percent to P23.1 billion, due to the full impact of depreciation and interest costs for GNPower Dinginin Ltd. Co.
Weaker spot market prices also offset the improvements recorded in power sales volume.
The company has business in power generation, distribution, retail electricity services and distributed energy. Its power generation portfolio includes both renewable and nonrenewable generation plants.
Aboitiz Power is the leading power generator in the Philippines as of first half of the year, with a market share of 23.86 percent in the national grid, based on data from the Energy Regulatory Commission.
