U.S.-BASED power giant AES Corp. has taken initial steps to expand its 600-megawatt Masinloc coal-fired facility in Zambales, only weeks after President Aquino announced the multimillion-dollar investment deal.
In a statement, AES said the infrastructure investment needed to expand the Masinloc power generation facility, which is currently generating over 600 MW, would require up to $800 million.
“Based on our experience to date, the Philippine economy continues to show significant levels of growth, which requires new low-cost electric generation capacity,” said AES president and CEO Paul Hanrahan.
“Our Masinloc I facility was built in a way that included much of the critical infrastructure for the expansion unit, allowing us to provide one of the lowest cost alternatives for capacity expansion. We look forward to continuing our work within the Philippine power sector to help meet its growing demand for electricity.”
Hanrahan met with Aquino and Energy Secretary Jose Rene D. Almendras last Sept. 22 to discuss AES’ plan to double the capacity of its 660-MW Masinloc I coal-fired power plant.
AES is now working on the necessary permits while putting in place the financing it will need. The company said the expansion project would be funded with a combination of non-recourse financing and equity.
Energy Secretary Jose Rene D. Almendras said AES would likely start construction in 2011. By 2014, the power plant with the added capacity is expected to go online. That year, the Luzon grid will need the extra 600 MW to avert rotating brownouts.
Through its acquisition of the Masinloc I facility from state-run National Power Corp. in 2008, AES became the largest foreign investor in the country’s power sector.
As a result of capital investment and operational improvements, AES increased Masinloc’s capacity to 630 MW from 450 MW; improved availability to 74 percent from 50 percent; and increased net production by 62 percent within two years.
AES also improved the plant’s environmental performance, lowering emission levels in compliance with World Bank standards.
The Masinloc II project would leverage the existing infrastructure, transmission interconnection and AES’ operating experience in the Philippines, the company said.
According to the AES statement, the Philippine economy is projected to grow at an average of over 5 percent year on year through 2015, with demand for electricity set to grow 5 percent throughout the same period.
AES is a Fortune 500 global power company with generation and distribution businesses in 30 countries.
The company owns and manages $40 billion worth of assets. Last year, its revenue reached $14 billion.
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