Expansion slated for Masinloc plant

Business World Online
Posted on September 29, 2011 10:16:17 PM


AES PHILIPPINES Corp. is taking a staggered approach to the planned expansion of its Masinloc coal-fired power plant to feel out the market, a ranking official yesterday said.
The American firm wants to wait until the first phase of its planned expansion of the 660-MW Masinloc coal power plant in Zambales is finished before determining if the second phase will push through.


“We are permitted to expand Masinloc by 600 MW. The first 300 MW will be up by 2013,” AES Philippines Country Manager Andrew J. Horrocks told reporters in a chance interview.


Mr. Horrocks said the first 300-MW expansion in the power plant will cost $500 million and the company is currently negotiating for local and international project financing.


“However, we will only put up the next phase if it is feasible and there is a market for that capacity,” Mr. Horrocks said.


The company is still hurdling regulatory processes for environmental compliance certificates.


“We believe by November we should have those permits,” Mr. Horrocks said.


Afterwards, the firm will still have to negotiate with engineering contractors and complete “financial closure” as well, he added.


The planned expansion of Masinloc is one of the investments announced by President Benigno S.C. Aquino III after his first state visit to the United States.


The company is looking for potential off-takers to provide the additional power from its expansion.


“We are currently still looking for off-takers. We also need new contracts with our current off-takers if we want to sell the additional power to them,” said Mr. Horrocks.


AES won the bid to operate Masinloc in 2008 for $930 million, currently the biggest asset sale of the Philippines.


The firm was reported to have complained of its purchase back then when it still had to compete with state-run power plants that sold output at lower, subsidized rates according to leaked US Embassy cables.


Earlier, the Energy department said AES is facing opposition from groups against coal power. However, Mr. Horrocks said the company has good relations with the local community in Masinloc.


AES is also “open to any expansion that’s profitable and fits within our business program.” -- Emilia Narni J. David