An official of the company indicated that they are open into "looking at that option," but stressed that they have yet to assess the economics of the venture.

KEPCO, in partnership with Malaysian firm Ranhill Berhad, previously bid for the Masinloc asset but its offer was way below the $ 930 million tender put up by the AES group.

The American firm sees future value on the acquisition with its planned 600-megawatt capacity expansion of the Masinloc power plant.

In its project brief presented to the Asian Development Bank (ADB), the Masinloc Power Partners Corporation (MPPC) expressedly stated that it "plans to sell at a later stage 25-30 percent of its shares to a local partner."

AES has not been giving any cue on which parties it has been negotiating with.

The American firm indirectly fully owned the shareholdings of the corporate vehicle it set up for acquiring the Masinloc plant.

However, when it closed its $ 275 million loan with the International Finance Corporation (IFC), the latter proposed a taking of 6.0-percent partnership interest in MPPC.

Apart from the selldown plan, AES will also be pursuing a two-year rehabilitation program for the power facility to shore up its operating efficiency.

Funding for this activity will come mainly from the $ 200-million loan which the Asian Development Bank (ADB) intends to extend for the project.