Utility giant Manila Electric Company (Meralco) is ready to ink a power purchase agreement (PPA) which may cover the entire capacity of the $1.28 billion Subic coal-fired power facility of 600 megawatts that will be due on stream by the first half of 2014.
“We should be able to accommodate the 600MW, but it is a function of what price… and there are also other interested parties,” Meralco senior executive vice president Oscar S. Reyes said.
With the signing of the Shareholders Agreement among project sponsors on Friday, the utility firm’s subsidiary Meralco PowerGen (MPG) officially became the majority shareholder in Redondo Peninsula Energy (RP Energy), with more than 50 percent equity. RP Energy is the corporate vehicle for the project.
Aboitiz Power’s wholly-owned subsidiary Therma Power Inc. and another partner Taiwan Cogeneration Corporation cornered the remaining shareholdings.
“With highly respected and well-established local and business partners, Meralco now signals its re-entry into power generation, nearly 40 years after relinquishing its power generation operations and 20 years after the ‘welcome mat’ had been laid out for private sector participation in power generation,” Reyes said.
The intent of the project developers would be mainly to offer the capacity of the baseload coal-fired plant as a cost-competitive source of power – be it for end-users already qualified under open access or those which will remain captive, mainly the residential end-users.
With Meralco’s interest in the project, it will also shoulder more than 50-percent of the equity cost portion. The 70-percent of the total project cost will be infused through project financing.
During the signing of the shareholders’ deal, several banks interested at offering financing were already hovering around the venue – including BDO Capital, RCBC, Philippine National Bank, PNB Capital, Bank of the Philippine Islands and First Metro Investment Corporation, among others.
For his part, Aboitiz Power president Erramon I. Aboitiz noted that the coal plant’s project design has been re-evaluated when Meralco came into the picture as their partner.
“As we initiated discussions with Meralco PowerGen, the configuration of the power stations was rethought again, this time using two 300-MW generating units with reheating capabilities,” Aboitiz said. (Myrna M. Velasco, Manila Bulletin)
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