UPDATE 1-Aboitiz highest bidder for Philippine power plants

MANILA, July 30 (Reuters) - AP Renewables of the Aboitiz Group (AP.PS: Quote, Profile, Research) put in the highest bid for two state-run geothermal plants in the Philippines at an auction on Wednesday, with an offer of $446.88 million, the government said.

Proceeds from the sale of the 289-megawatt Tiwi and 458.53-megawatt Makban geothermal facilities would be used to reduce National Power Corp's debts, which stood at $7 billion at the end of 2007.

Lourdes Alzona, vice-president for finance at the state's Power Sector Assets & Liabilities Management Corp (PSALM), said $800 million worth of power-related debt had been prepaid in the first half of the year, and around $1 billion more would be paid ahead of schedule in the second half.

AP Renewables' bid was far higher than the offer of First Luzon Geothermal Energy Corp, a fully-owned investment vehicle of PNOC-Energy Development Corp (EDC.PS: Quote, Profile, Research), which submitted a bid of $368.4 million.

Jose Ibazeta, president of PSALM, said AP Renewable's bid met the reserve price, which he refused to disclose.

If the bid is approved, AP Renewables needs to deliver 40 percent of the payment in the next nine months, Ibazeta said.

The rest of the payment can be made in instalments over the next 7 years.

An announcement confirming the award of the plants has to be made within 30 days.

If the sale goes through, the government would have sold a total of 68.76 percent of the 4,335.70 MW of operating capacity of plants on the main island of Luzon and in the central Visayas region.