Meralco unit earmarks $1.2B for equity in 3 coal power plants

By Riza Olchondra, Philippine Daily Inquirer (29 July 2015)

The Meralco group is investing $1.2 billion in three coal-fired power plants to be developed over the next five years.

Meralco CFO Betty Siy-Yap told reporters that there were presently three active projects under Meralco PowerGen Corp. (MGen), the energy unit of Meralco that deals with traditional energy technologies.

The three projects combined have a total capacity of up to 2,255 megawatts (MW) if the three power stations are built to full potential.

These are the 455-MW San Buenaventura Power Ltd. (SBPL) power plant in Quezon province, the 600-MW Redondo Peninsula Energy (RP Energy) power plant in Subic and the 1,200-MW Atimonan One Energy power plant also in Quezon province.

For the first two projects, MGen will have partners but it will take a majority stake in both. Equity, alone, will be about $1.2 billion.

About $800 million is being allocated for Atimonan, being a fully owned project, and the rest will go to RP Energy and SBPL.

Site preparation works are on-going for SBPL, which has a power supply agreement with Meralco that was approved by the Energy Regulatory Commission in May.

SBPL is set to finalize a loan with local banks in August and issue a final notice to proceed to contractors.

The engineering, procurement and construction (EPC) deal has been awarded to “a consortium of reputable Korean and Japanese contractor and equipment supplier.” The site preparation contract was awarded to SC Megaworld Development Corp.

This project is expected to be completed in early 2019.

Officials said RP Energy was actively working on all remaining development activities to facilitate financial close and start construction of the power plant.

“We are evaluating, subject to transmission issues, either building a 300-MW, or a phased 600-MW, or a one-shot 600-MW project. The options and risks are currently being evaluated,” MGen general manager Aaron Domingo said.

Construction is scheduled to start in the first quarter of 2016 for completion in the second half of 2019.

The coal-fired power plant in Quezon province, to be built with two units of 600 MW each, has been undergoing public consultations (since May 2015).