A significant shift is underway in the energy landscape as AboitizPower embarks on its first major international venture. The company has agreed to acquire a 25% stake in Van Phong Power Company Limited, the operator of a substantial 1,320-megawatt coal-fired power plant in Vietnam, in a deal valued at $220 million.
This strategic move marks a pivotal moment for AboitizPower, extending its reach beyond the Philippines and establishing a foothold in a rapidly growing Southeast Asian market. The Van Phong plant, situated in Khánh Hòa Province, only recently commenced commercial operations in January of this year, already delivering a considerable 8.5 billion kilowatt-hours annually to Vietnam’s national grid.
The plant’s importance is underscored by its long-term contract – a 25-year power purchase agreement with Vietnam Electricity – and its status as the largest foreign-invested power facility within the Van Phong Special Economic Zone. This agreement guarantees a stable revenue stream and solidifies its role in Vietnam’s energy future.
AboitizPower emphasizes that this investment isn’t a departure from its commitment to sustainability, but rather a complementary step. The company intends to balance this thermal energy asset with its ongoing and ambitious renewable energy initiatives, ensuring a diversified and reliable energy portfolio.
The transaction is currently awaiting necessary regulatory approvals, a standard procedure for international investments of this magnitude. Once finalized, it will represent a crucial component of AboitizPower’s broader strategy to achieve a 9.2-gigawatt total attributable net sellable capacity by 2030.
The seller, Sumitomo Corporation, is a Japanese conglomerate with diverse interests spanning multiple industries, including metals, automotive, and infrastructure. Their involvement highlights the international appeal and strategic importance of the Van Phong power plant.
Despite this expansion, AboitizPower has faced recent financial headwinds. Core net income experienced a 15% decline in the first nine months of the year, attributed to depreciation and interest expenses related to another significant coal plant, GNPower Dinginin in Bataan.
Nevertheless, AboitizPower remains a dominant force in its home market, currently holding the largest share – 23.86% – of the national grid in the Philippines, as recognized by the Energy Regulatory Commission. The company’s stock saw a slight dip following the announcement, closing at P40.90 per share.
