Meralco Powergen Corp. (MGen) is scouting for possible business partners for the development and construction of its 1,200-megawatt (MW) coal-fired power project in Atimonan, Quezon.
MGen is a subsidiary of Manila Electric Co. (Meralco), the country’s largest power distributor.
Although the company has enough financial resources to undertake the project, Meralco chairman Manuel Pangilinan said they still need partners because the project is “too big.”
“Purely from a financial perspective we don’t need partners, but you know, it is a big project. It will cost you $2 billion, so spread the risk,” Pangilinan told reporters.
Because of the magnitude of the project, Pangilinan said they are considering entering into a joint venture with foreign partners.
“Atimonan may need a foreign partner as long as Meralco has the majority stake,” he added.
Pangilinan also explained why MGen decided to shift to a coal-fired power facility from the original concept of building a natural gas-fired power plant.
“We’re still looking at possibilities on the gas side, but the reason we focused on coal is it’s still the cheaper source of power,” he said.
Angelito Lantin, MGen senior vice president and general manager, earlier said the decision was actually brought about by the lack of government policy support for the liquefied natural gas (LNG) industry.
Lantin, meanwhile, said MGen is in partnership with Japanese firm Chubu Electric Power Corp. for the coal-fired power project.
“Power produced from an LNG plant is more expensive than from coal. So we need the government’s policy or if the government will support, for example, a higher price for LNG as an option to coal,” Lantin said.
For his part, Meralco president and chief executive officer Oscar S. Reyes gave an update on developments in connection with the Atimonan power project.
He said MGen has already engaged an experienced international engineering firm as owner’s engineer while the engineering, procurement and construction (EPC) pre-qualification process has also started.
“The environmental compliance certificate application process has also started,” he added.