Meralco PowerGen Corp. to spend $1.2 billion for three power projects

Business Mirror
by Lenie Lectura - July 28, 2015

MERALCO PowerGen Corp. (MGen), the power-generating arm of the country’s largest power-distribution firm, is earmarking $1.2 billion for three power projects that are targeted for completion between 2019 and 2020.

“On equity alone, our estimate is about $1.2 billion for the three projects,” Manila Electric Co. (Meralco) CFO Betty Sy-Yap said. The amount excludes the debt component of the projects’ total costs.

MGen and its partners have three power projects in the pipeline.

San Buenaventura Power Ltd. Co. (SBPL), a joint venture of MGen and New Growth BV, a wholly owned subsidiary of Electricity Generating Public Co. Ltd. of Thailand, is putting up a 455-megawatt (MW) coal power plant in Quezon.

It has already awarded the Engineering, Procurement and Construction (EPC) contract to Korean firm Daelim and Japanese firm Mitsubishi Heavy Industries. The site-preparation contract, meanwhile, was awarded to SC Megaworld Development Corp. The project is targeted for completion in early 2019. Also, SBPL is targeting financial cost and final Notice to Proceed for the project before end of the third quarter of 2015.

Another coal project, a 600-MW power plant in Subic, is being undertaken by Redondo Peninsula (RP) Energy, a joint venture among MGen, Aboitiz Power Corp. and Taiwan Cogeneration Corp.

RP Energy is actively pursuing the completion of all remaining development activities to allow the project to achieve financial closure and commence construction of the power plant.

The project proponent is now evaluating a “300-MW versus 600-MW transmission options and risks.” The target commencement of construction is first quarter of 2016, while target completion is in the second half of 2019.

Meanwhile, MGen is looking for partners for a 2×600-MW coal-fired power plant in Quezon. Atimonan One Energy is the project proponent. An Environmental Certificate of Compliance for the project is expected to be released in the third quarter of this year.

An EPC tender process has commenced for the project. The tender responses are expected later this year, with selection of preferred EPC contractor in 2016.

A grid impact study for the project has been completed, while a facility study is ongoing and is expected to be approved by the fourth quarter of this year.

Target completion of Unit1 is late 2020, as on-site works are targeted to start in mid-2016. “For now, we have three projects. So, that’s RP Energy, SBPL and Atimonan. The two projects, we clearly have partners. For Atimonan, in the meantime, we’re developing it as 100 percent,” Yap said.

“So, on that basis, 30-70 project finance and two projects that we are taking majority, the estimate is $1.2 billion on equity, minus the debt,” the Meralco official added.

Meralco, through MGen, is gearing up to achieve a target of providing 3,000 MW of power capacity in Luzon.

Besides the three projects, the company is also in talks with Japanese firms for a potential 1,500-MW liquefied natural gas project. MGen is also part of Global Business Power Corp. (GBPC) through its 22-percent interest. GBPC is one of the largest independent power producers in the Visayas region.

Meanwhile, MGen has also ventured abroad in partnership with First Pacific Co. Ltd.

The two have incorporated PacificLight Power Pte. Ltd., which holds a 70-percent stake in GMR Energy Singapore Pte. Ltd.—the owner of an 800-MW natural-gas power plant in Jurong Island, Singapore. source