Marubeni seeks more time to invest in Calaca coal-fired plant

Posted on November 22, 2016
http://www.bworldonline.com/content.php?section=Corporate&title=marubeni-seeks-more-time-to-invest-in-calaca-coal-fired-plant-&id=136687

JAPANESE FIRM Marubeni Corp. has sought for more time before it signs a deal to formally become the third partner in the 700-megawatt (MW) coal-fired power plant in Calaca, Batangas being jointly developed by Semirara Mining and Power Corp. (SMPC) and Meralco Powergen Corp. (MGen).

“Marubeni is just waiting for clearance from the mother company,” said Isidro A. Consunji, chairman and president of DMCI Holdings, Inc., the parent firm of SMPC.

In a press briefing on Monday, Mr. Consunji said Marubeni asked for a 90-day extension, which began in October, before taking a 20% stake in St. Raphael Power Generation Corp.

St. Raphael is the wholly owned SMPC subsidiary created on Sept. 10, 2013 to engage in the power generation business. The unit is the entity for the proposed Calaca plant. SMPC and MGen will each hold 40% in the company.

DMCI officials said they chose Marubeni because the group had been their partner in Maynilad Water Services, Inc., a company where the holding firm has a stake. They also said the Japanese firm had shown “serious interest” in the project.

Funding for the St. Raphael project will be made up of 70% debt and 30% equity, Mr. Consunji said. At a cost of $2 million per megawatt-hour, the Marubeni stake would be around $80-$85 million, the DMCI officials said. The project is estimated to cost $1.4 billion.

Marubeni was originally expected to sign the partnership in October but this did not push through pending the approval of the power supply agreement being sought for approval by Manila Electric Co. (Meralco) and St. Raphael.

The supply deal was filed with the Energy Regulatory Commission (ERC) in May and remains pending. An environmental compliance certificate had been issued by the Department of Environment and Natural Resources for the project.

Mr. Consunji also said SMPC was in talks with US company Black & Veatch as the possible engineering, procurement and construction (EPC) contractor. He added that borrowing the funds for the project would be “easy” once a PSA approval has been obtained.

In the same briefing, he said SMPC had revived its plan to put up a retail electricity supplier (RES).

The company is awaiting ERC approval for its application, which was filed last year, or even before the biggest power users entered into the contestable market.

“We might need it,” said Mr. Consunji, adding that the RES affiliate would be named Sem-Calaca RES Corp.

SMPC generates revenues through the sale of sub-bituminous coal sourced from Semirara Island in Caluya, Antique. One of its seven wholly owned power subsidiary, Sem-Calaca Power Corp. (SCPC), supplies power under various bilateral contracts. Its excess generated power is sold to the Wholesale Electricity Spot Market (WESM), the venue for trading electricity in the country.

SCPC owns the Calaca power plants in Batangas, on which Sem-Calaca Industrial Park Development, Inc. plans to develop certain areas into an economic zone to cater to industries that are near the plants. The company’s total contracted energy in 2015 was at 491.4 MW, of which 420 MW is for Meralco.

On Monday, shares in SMPC slipped 2.62% to P130 each.