By VG Cabuag - May 20, 2018
METRO Pacific Investments Corp.
(MPIC) said it is studying some “structural solutions” to the prevailing
power-excess capacity in Singapore, possibly merging or consolidating its
assets with other players in the city-state.
David Nicol, MPIC CFO, said the company
received different offers from many parties, and it is still in the evaluation
stage.
“There is a lot of surplus capacity
in the Singapore market. The Singapore government, with good reason, encouraged
lots of investments in power generation, and the private sector responded, and
there’s now so much. The prices are difficult. It’s hard to see anybody in the
market making money. And so I think there’s some talk of combining to try and
reduce the surplus of capacity,” Nicol said.
“Even if the economic growth rate is
high, the correlation to growing consumption is quite low. Here it is quite
high, and it is much lower in Singapore. I think it’s a merchant’s market, and
that’s difficult,” he said.
In April 2013 Metro Pacific unit
Manila Electric Co., in partnership with MPIC’s mother company First Pacific
Holdings Inc., bought a 70-percent stake in GMR Energy, now known as
PacificLight Power, for $488 million. At that time, GMR was in the middle of
putting up an 800-megawatt (MW) LNG power plant commissioned in February 2014.
“The frustrating thing about this is
it’s a very efficient plant. As an engineering thing, it’s great as an
efficient operator of gas plants. It is absolutely world class. The problem is
there’s just too much power available in Singapore,” Nicol said.
At home, MPIC is busy beefing up its
capacity due to the shortage of power. The company said it will try to bring
its power investment in the Philippines to 1,600 MW of “predominantly
ultra-supercritical coal-fired generating capacity” by 2022, MPIC Chairman
Manuel V. Pangilinan said.
Nicol said the investment may
require as much as $3.2 billion, with around $500 million to $600 million or
approximately P30 billion comprising equity.
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