MERALCO PowerGen Corp. (MGen) is raising P40 billion to finance the expansion of its 460-megawatt San Buenaventura coal power plant in Mauban, Quezon.
“We are raising about P40 billion from the debt market,” MGen SVP for commercial development Angelito U. Lantin told reporters.
Lantin said Mgen, the power generation arm of Meralco, is now in the final stage of the engineering, procurement and construction (EPC) talks with the preferred contractor for the plant’s expansion.
“We are finalizing our EPC with our preferred contractor. We are also in the process of selecting arrangers for the project financing,” he added.
He expressed confidence that Mgen’s power supply agreement with Meralco will be approved by the Energy Regulatory Commission (ERC).
“We hope that within six months, it will be approved (by ERC),” he added.
Pending the ERC approval, Lantin said they will proceed with the issuance of notices possibly by next year.
“Everything is geared up for the completion of these activities. We hope to issue a notice to proceed very early next year,” he said.
The Meralco subsidiary plans to start construction in the fourth quarter.
For his part, Meralco President and Chief Executive Officer Oscar S. Reyes said their goal is to finish the project before the summer of 2018.
“We need to have this project before the summer of 2018 so that we have some degree of relief from the risk of red alert as demand continues to increase,” he added.
Reyes said once completed, the project will boost the Luzon grid’s capacity.
“We are fully aware of the prevailing power supply and demand situation where I think the Luzon grid faces fairly thin reserves until new power plant capacities come into place,” he said. RITCHIE A. HORARIO