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PCC approves SMC Global’s $1.8bn coal power plant acquisition

EBR Staff Writer Published 27 February 2018

SMC Global Power has received an approval from the the Philippine competition regulator for its $1.8bn acquisition of 965MW coal power plant and a 10MW energy storage project in the country.

Approving the transaction, the Philippine Competition Commission (PCC) said that the deal would not lessen competition in the power generation and retail electricity markets. 

The regulator said: "The transaction is not likely to substantially increase the likelihood that the parties will engage in anti-competitive coordinated behavior."

The acquisition to be made through two separate transactions includes the under-construction 335MW Masinloc 2 coal-fired power plant and the operating 630MW Masinloc coal-fired power plant and the 10MW Masinloc energy storage project.

The three power projects are owned currently by Masinloc Power Partners (MPPCL), a joint venture between AES Phil Investment, an AES subsidiary, and Gen Plus, an EGCO subsidiary.

SMC Global Power, which is a subsidiary of Filipino conglomerate San Miguel, has proposed to buy AES’ stake of 51% in the three power projects along with a similar stake in the latter’s subsidiary Masin-AES for a total of $1.05bn. Masin-AES is the owner of AES’ business interests in Philippines.

In the other transaction, SMC Global Power proposed to buy the remaining stake of 49% in the three power projects owned by EGCO Group for $850m.

Through the transactions, SMC Global is looking to enhance its baseload capacity to offer affordable and reliable supply of power to its customers, said PCC.

 The regulator said in a statement: “There remain sufficient post-acquisition competitive restraints from competitors in the  power generation and retail electricity supply market.

"There appears neither increased ability nor incentive to engage in anti-competitive foreclosure, post-acquisition."

Currently, SMC Global’s portfolio in the power generation market includes Sual Power Plant in Sual, Pangasinan; San Roque Hydroelectric Multipurpose Power Project in San Manuel, Pangasinan; Ilijan Power Plant in Ilijan, Batangas; and Limay Greenfield Clean Coal Plant in Limay, Bataan, among others.

On the other hand AES owns Masinloc Coal-Fired Thermal Plant and Masinloc Battery in Zambales and Kabankalan Battery Storage System in Kabankalan, Negros Occidental.

Image: PCC has approved SMC Global’s transactions to buy two coal-fired plants in Philippines. Photo: courtesy of alex_ugalek/ FreeDigitalPhotos.net.