Oil firm to start construction of $60-M biomass power plant

Eastern Petroleum, through renewable energy arm Eastern Renewables, will start constructing its $60-million (roughly P2.46 billion) biomass power plant in Mindanao by the third quarter of the year.

The plant is expected to start producing by 2015 with an initial output of 20 megawatts, said Eastern Petroleum chair Fernando Martinez.

“We will appoint our EPC (engineering, procurement and construction) contractor in two months’ time and we expect financial closing within the first semester,” Martinez said.

The project will be funded with loans (70 percent) and equity (30 percent).

Martinez said that more than just providing another source of power for Mindanao, the biomass plant to be put up in Agusan will ensure “inclusive growth” from the sourcing of the feedstock, which would be wood chips, to income sharing with the host communities.

“Eastern Renewables has entered into a joint venture with Manobos Tribal Council in Agusan del Sur for the cultivation of a 10,000-hectare industrial tree plantation to secure the feedstock requirements of its proposed biomass power plant,” Martinez said.

“The project will improve and ensure the livelihood of the community, avoiding the slash-and-burn practice and charcoal making among natives. With each hectare needing at least 1,000 seedlings to be planted and harvested within five years, the estimated job generation and income for the indigenous community will provide substantial economic impact to their Manobo tribe which was earlier awarded a 50,000-hectare Tenural Title under Ancestral Land Domain,” he added.

Martinez said 20 percent of the company’s profit would be turned over to the tribal council, on top of what they will be paid for providing the feedstock. This, he stressed, would be the first time that a company will give that much for its host communities. Amy R. Remo