Mirae Asia Energy Corp., a Korean-backed power firm, is raising its capitalization to $15 million in order to finance its 20-megawatt (MW) solar power project in Currimao, Ilocos Norte.
The project is estimated to cost $50 million, so the company should have capitalization of at least $15 million, Mirae vice president Lito A. Badua said on the sidelines of the Luzon Energy Investment Forum. “We need to bring in that money so that we will be able to borrow enough funds.”
The company, with present capitalization of about $1 million, is thus finalizing talks with investors to boost its capital. The Philippine project is, in fact, the largest solar project of the Korean principal.
Mirae has a certificate of commerciality from the Department of Energy and has secured an engineering, procurement, and construction contract. It has also obtained incentives from the Board of Investments.
He said that, since it secured the DOE certificate, several interested investors had been knocking on the company’s doors.
Construction will start in January 2014, while commercial operations may commence in July, Badua said.
The project will provide 30.5 MW in additional electricity to the Luzon grid, whose supply is now being threatened because of the spike in demand, brought on by the country’s growth.
With the 20-MW Currimao solar project, Mirae hopes to secure the guaranteed solar energy rate of P9.68 per kilowatt-hour (kWh), provided under the Department of Energy’s Feed-in-Tariff (FIT) program.
Competing with Mirae are ATN Philippines Solar Energy Group Inc. with its 30-MW Rodriguez solar farm, and Phil. Solar Farm Leyte Inc. with its 30-MW Ormoc solar project.
“There’s an oversubscription in wind and solar energy projects under FIT,” said Mario C. Marasigan, Department of Energy director for renewable energy.
There is a 50-MW cap for solar power, which means that the first two plants to be built may enjoy the FIT rates to be passed on to consumers (with a rate impact of less than P0.01 per kWh), he explained.