A unit of Aboitiz Power Corp. is set to build an 8.5-megawatt (MW) hydroelectric power plant in Isabela Province that will use irrigation water as its energy source.
In a disclosure to the Philippine Stock Exchange (PSE) on Thursday, Aboitiz Power said its subsidiary SN Aboitiz Power-Magat Inc. (SNAP-Magat) has entered into an agreement with the National Irrigation Administration (NIA) for the said project.
The proposed hydroelectric power plant will be constructed along the Maris Main (South) Canal in Isabela.
According to Aboitiz Power, the hydroelectric power plant will use the irrigation water released from the Maris Reservoir for the Maris Main (South) Canal.
“Maris Main [South] Canal is under the operation and management of NIA,” the company said.
The Department of Energy (DOE) awarded a hydropower service contract (HSC) for Maris Main Canal 1 to SN Aboitiz Power-Greenfield Inc. It also granted the assignment of the HSC from SNAP-Greenfield to SNAP-Magat.
Construction of the project will start this quarter and is targeted to be completed by November 2017, Aboitiz Power said.
SN Aboitiz Power (SNAP) Group is still finalizing the detailed engineering design and cost estimates and plans to complete them prior to the November construction date.
The project will be funded initially by SNAP shareholders SN Power and AboitizPower.
The agreement is the culmination of two years of planning and coordination by SNAP-Greenfield’s development arm and NIA.
The Maris reservoir began operating in the 1980s and has since regulated the flow of water used for irrigation.
The project will provide additional revenue to NIA through fees for the use of irrigation water for power generation and land lease.
It also includes replacement and automation of NIA irrigation intake gates to improve control and efficiency of irrigation water delivery for the benefit of the farmers.
It will also bring mandatory and voluntary benefits to the host community through SNAP’s corporate social responsibility program.
The company earlier reported that it is optimistic about its expansion program overseas, especially in Indonesia.
Through PT Auriga Energi, it is currently conducting pre-feasibility studies for the exploration and development of a potential 127-MW hydropower generation project in Indonesia.
The hydropower generation project will be located along the Lariang River in Central Sulawesi, Indonesia.
AboitizPower has also expressed interest in participating in the exploration and development of a potential 100-MW greenfield geothermal plant in East Java Province, Indonesia.
Aboitiz Power, the power unit of Aboitiz Equity Ventures (AEV), is one of the biggest power players in the country. To date, Aboitiz Power has a generation capacity of around 2,400 MW and it plans to increase this to 4,000 MW by 2019.