Marubeni Joins Pagbilao's Plant Expansion

Manila Bulletin
By MYRNA M. VELASCO
September 28, 2011, 10:58pm


MANILA, Philippines — The most awaited investment decision on the 400-megawatt expansion of the Pagbilao coal-fired power facility is finally moving headway with the tie-up arrangement firmed up by Japanese firm Marubeni Corporation with Aboitiz Power group on such undertaking that will cost $600 million to $700 million.


In a statement to the media, Aboitiz Power disclosed that it signed an agreement with Marubeni in Tokyo yesterday (September 27) “to formalize their intention to jointly develop, build and operate a 400-MW coal-fired plant.”


The investment pact, initially sealed through a memorandum of understanding (MoU), was signed by AboitizPower President and CEO Erramon Aboitiz, and Marubeni Executive Managing Director and Board Member Shigeru Yamazoe.


The project sponsors for the new power plant, however, qualified that the facility will basically be considered a new one. The use of the term ‘expansion’ is being used with caution given that the project and market structuring of the 400-megawatt facility differs entirely from the construction and implementation parameters of the existing Pagbilao asset.


Aboitiz firm’s wholly-owned subsidiary Therma Luzon, Inc. (TLI) is currently the independent power producer administrator (IPPA) for the Pagbilao facility – which simply means that it assumed the responsibilities of trading (at the spot market) and selling the plant’s capacity to interested off-takers.


The partnership of the two firms for the facility’s expansion will then solve dilemmas as to the utilization of common or shared facilities – which are deemed vital in the proposed expansion because they can provide economies scale in magnitude of investment costs. The facility is targeted on stream between next year to 2013.


Describing the deal as part of the Aboitiz group’s overall goal to provide competitively-priced power in the country, the company’s chief executive expressed optimistic that they can bring the project to fruition.


“We are very pleased to work with Marubeni at optimizing the capacity of the Pagbilao power station,” Aboitiz said.


Apart from Pagbilao, Energy Secretary Rene D. Almendras disclosed that discussions for the expansion of the Sual power facility in Pangasinan have also progressed as there have been separate talks between Marubeni and San Miguel Corporation president Ramon S. Ang during President Aquino’s state visit in Japan.