One of the Japanese partners of Aboitiz Power Corp. (AboitizPower) in the 420-megawatt (MW) Pagbilao-3 coal-fired power plant is moving ahead on the divestment of its stake in the facility as part of an investment realignment to cleaner energy technologies.

According to a source privy to the planned equity sale, Japanese firm Marubeni Corp. already had a discussion with AboitizPower on its plan to opt out from the Pagbilao-3 coal-fired facility.

“We already had talks with our local partner AboitizPower on the plan to divest our shareholdings and we are now scouting for buyers,” the source emphasized.

The source further noted that, “we also communicated this plan to our other JV [joint venture] partner JERA, and they also consented to the plan; and we’ve known that JERA is also willing to sell its equity in the Pagbilao-3 plant if there are takers.”

When asked if AboitizPower will purchase the shares being offloaded by partners, company President and Chief Executive Officer (CEO) Danel C. Aboitiz stated to Manila Bulletin that “our interest would be dependent on economics,” qualifying further that they will need to review the terms of their agreement.

JERA Co. Inc., which is also a Japanese firm, along with Marubeni, hold a combined 50-percent stake in the coal-fired power facility through their joint local subsidiary, TeaM Energy Philippines, while the remaining 50 percent is held by AboitizPower.

The source similarly indicated that Marubeni, in particular, “is still looking for new investments in the Philippines, but mainly in the renewable energy (RE) sector; and we will also enhance our portfolio in the RES [retail electricity supplier] space—these are our core interests moving forward.”

The $976-million Pagbilao-3 coal-fired power project formally reached commercial operation in May 2018, and its capacity had been a valuable addition to Luzon grid’s power supply at the time.

The source added that “for JERA, it would only be its shareholdings in the Pagbilao-3 plant that it will likely be unloading, but its equity acquisition in AboitizPower will remain.”

To recall, JERA scooped up a 27-percent stake in AboitizPower in 2021 for $1.58 billion, which was through a transaction cemented with Aboitiz Equity Ventures Inc. (AEV), the parent firm of AboitizPower.

That specific shares acquisition is separate from the partnership that JERA holds in the Pagbilao-3 plant—this is because the generating facility investment had been done through TeaM Energy, its tie-up corporate entity with Marubeni.

The coal plant, which is under corporate vehicle Pagbilao Energy Corp. (PEC), had equally split its capacity of more than 200 MW each to project sponsors AboitizPower group and TeaM Energy. The facility is equipped with pulverized sub-critical coal technology.

JERA, in particular, wields formidable influence as Japan’s mammoth power generation company and is also strategically positioned as the largest buyer of liquefied natural gas (LNG) in the world. Hence, its grip in the global gas industry will be beneficial to its continuing joint venture with AboitizPower, primarily on the gas generation portfolio.

The Pagbilao-3 plant served as an expansion of the first two units of 735-MW capacity that were first developed under the independent power producer (IPP) investment model in the 1990s as instituted by state-run National Power Corp. (NPC) and underpinned by Philippine government policies. But the asset was eventually privatized and cornered by AboitizPower.

The site of the Pagbilao plants, according to sources, can still accommodate another expansion and the prospective capacity addition is perceived to be exempted from the prevailing coal moratorium policy.