Eastern signs pact with Manobo tribe

Manila Standard Today

By Alena Mae S. Flores   Posted on Feb. 04, 2013 at 12:01am

Eastern Renewables Corp., a unit of Eastern Petroleum Corp., signed an agreement with the Manobo Wawa Sectoral Tribal Council in Agusan del Sur to develop a 10,000-hectare industrial tree plantation that will supply the feedstock requirement of its planned 20-megawatt biomass power plant.

Eastern Petroleum chairman Fernando Martinez told reporters the agreement entitled the Manobo council a 20-percent share of the net revenues from the $60-million biomass plant.

Martinez said the company would finance the construction cost through a combination of loan (70 percent) and equity (30 percent).

“The financial closing for our biomass project and the EPC [engineering, procurement and construction contract] are expected to be finished in the first semester this year as construction is targeted in the third quarter,” he said.

The company hopes to complete the biomass plant by 2015.

Martinez said the plant would improve and assure the livelihood of the community and eliminate the slash-and-burn practice, popularly known as ‘kaingin,’  and charcoal making among the natives.

Eastern plans to plant 1,000 seedlings for every hectare cultivated. These will then be harvested within five years.

Martinez said the project would also generate jobs and income for the indigenous community.

“It will provide substantial economic impact to the Manobo tribe,” Martinez said.

Martinez hopes to start construction of the plant in the third quarter, although  the company is still awaiting approval of the biomass plant’s service contract from the Energy Department.

Martinez said the company started the documentation process on the service contract of the plant.

Eastern plans to sell the plant’s electricity output to Agusan del Sur Norte Electric Cooperative Inc. and the Wholesale Electricity Spot Market.

Martinez earlier said some companies expressed interest to forge a joint venture with Eastern Petroleum for the biomass project. He said Eastern was pursuing the project on its own for now.

He assured the project had sustainable supply of fuel because of an existing tree plantation in the province, adding it would generate at least 500 direct and indirect jobs.   source