(The Philippine Star) | Updated June 19, 2013 - 12:00am
MANILA, Philippines - APC Group Inc. expects to start commercial operations of a $300-million geothermal power project in the Cordilleras by 2018, ushering the entry of the SM Group into the energy production business.
APC Group, a subsidiary of SM Group’s leisure and gaming unit Belle Corp., targets to achieve a generation capacity of as much as 300 megawatts (MW) in the long run, company executives said.
“We will focus on the completion of the financial restructuring program and the exploration of our geothermal resources,” said APC Group president Frederic DyBuncio.
“If all goes well, the company may start producing electricity by 2018. Future revenue streams will be coming from the geothermal power projects,” said chief Finance officer Bernardo Lim.
The most advanced project of APC Group is in Kalinga province, which was already subjected to geophysical and geotechnical surveys.
“By third quarter of 2014, we are going to drill exploration wells. If the exploration wells will prove the existence of a commercial source, we will start the construction of a power plant,” Lim said.
APC Group will invest $300 million to put up the 100-MW power plant, which is a joint venture with Chevron Geothermal Philippines Holdings Inc.
Belle owns around half of APC Group.
Other geothermal service contracts of APC Group are the Mainit-Sadanfa geothermal project and Buguias-Tinoc geothermal prospect in Kalinga and Benguet province, respectively.
The power generation potential of the two projects are 60-100 MW each, APC Group said.
Lim said the company is in the process of securing the consent of indigenous people in the host communities prior to the project development.
APC Group also owns APC Cement Corp., which is planning to build a cement plant with a capacity to produce 1.5-million metric tons per year.
“Based on previous studies, it will require $250 million to set up the plant, Lim said. However, APC Group is open to selling the project as it focuses on geothermal prospects.
APC Group’s stockholders approved yesterday the company’s restructuring program, reducing the par value of its shares to 25 centavos from P1. It will reduce capital deficiency to P2 billion from P7 billion, Lim said.
In April, the market speculated that SM Group will consolidate all its energy-related assets into APC Group following the company’s restructuring program.
“There is no decision yet,” DyBuncio said when asked about the possible consolidation program.
The Sy family, which has interests in banking, property and tourism, aims to build a presence in the local energy market.
The SM Group, through private firm All First Equity Holdings, is global oil giant Chevron’s partner for the latter’s geothermal power business in the Philippines. They formed Philippine Geothermal Power Production Co. Inc., a 60-40 joint venture firm in favor of the Sys to comply with the Constitution which limits foreign equity ownership of entities engaged in the exploration of indigenous or renewable energy resources to only 40 percent. source
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