NPC chief lists possible financiers for Mindanao hydro plant rehabilitation

By Lenie Lectura - September 6, 2018

https://businessmirror.com.ph/npc-chief-lists-possible-financiers-for-mindanao-hydro-plant-rehabilitation/

Multilateral lending institutions are keen on shouldering the financing of the multibillion-peso rehabilitation of the Agus-Pulangui hydropower complex, according to an official of the National Power Corp. (NPC).

NPC President Pio Benavidez said there are other interested entities, aside from China, that are interested to participate in the rehabilitation of the hydropower complex, which supplies Mindanao electric power consumers more than 50 percent of total electricity requirements.

These include “ADB [Asian Development Bank], World Bank, Jica [Japan International Cooperation Agency] and probably Chinese.” He added that the rehab cost could reach anywhere from P37 billion to P50 billion.

The Agus complex, which has 728 megawatts (MW) of installed capacity, consists of six cascading power plants strategically located along the Agus River.

The Pulangui complex, meanwhile, is a 255-MW hydropower facility with three generating units. Both facilities, however, already have de-rated generation.

The government is keen on commencing the rehabilitation of the Agus-Pulangi complex aimed at extending the facilities’ service life by 30 more years and to increase the plants’ reliability and availability.

The Department of Finance, which chairs the Power Sector Assets and Liabilities Management Corp. (PSALM), earlier said it wants to tap funds from China for the rehabilitation of the Agus-Pulangui hydropower complex. Once rehabilitated, PSALM can proceed to privatize the power asset. By doing so, the state firm believes that it could fetch a higher value when sold to interested bidders.

PSALM is the agency tasked to manage state-owned power assets. NPC is still the owner of the hydro complex. The hydropower complex is required to be privatized under Republic Act 9136, or the Electric Power Industry Reform Act of 2001, the law that restructured the energy sector.

The NPC official said the World Bank will extend a grant for the conduct of a feasibility study. “After the feasibility study, we will bid out the rehab then we will think of the availability of the funding.  Jica wants 1.5 percent. The Chinese, 2 percent. World Bank also wants to join.”

Benavidez said the multilateral lenders are reviewing three rehabilitation methods. “Option 1: rated capacity plus safety of the plant. Option 2: increase the capacity of the rated plus safety and security of the plant. Third option is the first and second options plus improvement of water efficiency. These are the three options being looked at.”