Tuesday, May 22, 2018

MPIC studying options on selling Singapore power assets


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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