Meralco to invest $1.2B in 3 power projects

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Power distributor Manila Electric Co. (Meralco), through its power generation arm Meralco PowerGen Corp. (MGen), is spending $1.2 billion as its equity portion in the development of three power projects in Luzon.

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Meralco Chief Financial Officer Betty Siy-Yap said they are upbeat with these three power projects, two of which are located in Quezon Province and the third in Zambales.

These are the 455-megawatt (MW) San Buenaventura coal-fired power plant in Mauban, Quezon; the 600-MW coal-fired power plant in Subic, Zambales and the 1,200-MW coal-fired power plant in Atimonan, Quezon Province.

The Mauban power plant is being developed by San Buenaventura Power Ltd. Co. (SBPL), a joint venture of MGen with New Growth B.V., a wholly owned subsidiary of the Energy Generating Company of Thailand (EGCO).

SBPL is to set close the P40 billion financing for the construction of Mauban plant by next month. The project is expected to be completed by early 2019.

Aaron Domingo, MGen executive vice president and general manager, said the company is targeting the issuance of the Final Notice-To-Proceed for the San Buenaventura project before the end of the third quarter.

The engineering, procurement and construction (EPC) contract has already been awarded to a consortium of Japanese and Korean contractors.

Meanwhile, the Subic coal-fired power plant is being developed by Redondo Peninsula (RP) Energy Inc., a joint venture of MGen, Aboitiz Power Corp., and Taiwan Cogeneration International Corp.

Domingo said RPeninsula Energy is actively pursuing the completion of all remaining development activities to allow the project to achieve financial close and commence construction of the power plant.

The company, he added, is still evaluating whether to pursue a phased 600 MW construction of the Subic coal plant versus a single 300-MW unit subject to transmission option and risks.

MGen targets to commence construction of the RP Energy plant in the first quarter of 2016 while target completion is in the second half of 2019.

Siy-Yap said Meralco will have a majority stake in the two projects while the Atimonan project will be solely developed by MGen.

“The two projects, we clearly have partners. For Atimonan, in the meantime, we’re developing it as 100 percent [ours],” said Siy-Yap.

Domingo said the preparation for the 1,200 MW Atimonan coal-fired power plant is in full swing under Atimonan One Energy.

He said the environmental compliance certificate for Atimonan One is expected to be released in the third quarter of 2015.

“Engineering, procurement and construction or the EPC tender process has now commenced. Tender responses expected later this year, with selection of preferred EPC contractor in 2016. On-site works targeted to start in mid-2016. Target completion of Unit 1 in late 2020,” Domingo said.

Meralco Chairperson Manny Pangilinan earlier said that the company may take in a foreign partner for the Atimonan coal-fired power plant.

With these three power projects, Meralco is increasing its long-term power generation capacity target to 3,000 MW from the previous 2,700 MW to address higher demand in the Luzon grid.

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