Aboitiz Power, a power utility in the Philippines, has agreed to acquire an additional 15.6% equity stake in STEAG State Power (SPI) for $11m (615.26m pesos), the Manila Standard has reported.

The transaction will increase Aboitiz Power’s ownership in SPI to 85%. SPI operates the 210MW coal-fired power plant in Mindanao Island.

Aboitiz Power’s initial investment in the plant dates back to 2007 when it acquired a 34% stake. This was followed by an additional 35.4% in 2022.

The latest acquisition will boost the company’s attributable net income without increasing coal capacity on the grid.

Aboitiz Power is balancing thermal power with renewable energy sources within its energy portfolio.

The company views the acquisition as a move to sustainably manage an existing facility that is crucial for the Mindanao grid.

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It also noted that since the plant is already operational, the acquisition will not contribute to an increase in the country’s greenhouse gas emissions.

Aboitiz Power was quoted by the Manila Standard as saying: “With the energisation of the Mindanao-Visayas Interconnection Project (MVIP), this plant will be able to export much-needed capacity to the national grid, which has experienced tightness of supply reserves in recent years.”

The 450MW MVIP’s completion in January 2024 has enabled a unified power transmission network across the Philippines.

With the MVIP, the coal power plant can now increase its capacity to export to the national grid.

The share purchase agreement encompasses more than 73 million common and redeemable preferred SPI shares.

The move comes as part of Aboitiz Power’s broader investment strategy, with plans to invest 190bn pesos to expand its renewable energy capacity by 3.7GW over the ten years to 2033, Malaya Business Insight reported.

This expansion aims to triple the company’s current renewable energy portfolio to 4.6GW by 2030. It has 1GW of projects in wind, solar and geothermal energy currently in development.