Meralco PowerGen picks Japanese partner for $3-B Atimonan project

Published March 3, 2019, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2019/03/03/meralco-powergen-picks-japanese-partner-for-3-b-atimonan-project/

Meralco Powergen, the power generation arm of Manila Electric Company (Meralco), has chosen a Japanese partner for its $3-billion Atimonan ultra super critical coal-fired power project in Quezon province, but signing of a definitive agreement will need to wait until regulatory approval on the venture’s power supply deal.

Meralco Chairman Manuel V. Pangilinan revealed the decision, but did not divulge the incoming foreign joint venture partner.

It has been previously reported though that the last groups they had been choosing from were one local company and a Japanese firm – and sources indicated “it was the Japanese partner that Meralco had settled with.”

Meralco President Oscar S. Reyes qualified that the selection of Meralco PowerGen’s foreign partner in the 1,200-megawatt Atimonan project “is consistent with our strategy of having a strong joint venture for our projects.”

He stressed that the company prefers to “partner with reputable, credible strategic investor who can bring value – like technology and experience into the project.”

Reyes re-affirmed that the partner has been selected, “but we have not exactly signed” as the parties are still waiting for the regulatory go-signal on the power supply agreement (PSA) of the Atimonan project.

In a project brief provided by Meralco PowerGen, it was emphasized that the PSA had been filed with the Energy Regulatory Commission (ERC) three years ago, but the approval is still being awaited – along with the resolution of a related case filed with the Supreme Court.

The latest work that the project-developer firm had done was completing right-of-way (ROW) acquisition for the land that will be traversed by the transmission facilities to be installed to eventually underpin the capacity wheeling of generated electricity from the plant.

With all preparatory works almost completed, Meralco emphasized that Atimonan One Energy (AIE), which is the project’s corporate vehicle, is now just continuously “engaging the lender banks on its financial close,” while the engineering, procurement and construction (EPC) contractor had started site preparation works since November last year.

Meralco PowerGen previously announced that it signed mandate letters with seven banks for up to P107 billion worth of loan component for the Atimonan power project’s financing.

The Atimonan power project is targeted for completion when supply-demand gap is anticipated to intersect again around 2022-2023, inferring then that electricity supply in the country would already be cutting across wobbly or tightening conditions again.