GNPower seeks tax perks for power project
US-based GNPower Ltd. Co. is seeking tax incentives and other perks for its planned 405-megawatt coal-fired power plant in Mindanao.
In a public notice published in newspapers on Monday, the BOI said GNPower was applying for registration as new operator of a power plant with a pioneer status, given the magnitude of its investments. The project cost was, however, not indicated in the notice.
The proposed facility, which GNPower is constructing with Ayala-led AC Energy Holdings Inc., will be located at a site spanning from Barangay (village) Libertad to Tacub in Kauswagan, Lanao del Norte. It will use the pulverized coal technology.
If approved for registration, the power project will be entitled to a menu of fiscal and nonfiscal incentives, which are expected to make the business more competitive.
Government data showed that BOI-registered enterprises—particularly new projects with pioneer status—are exempted from paying income taxes for six years from the scheduled start of commercial operations.
Other incentives include exemption from taxes and duties on imported spare parts; exemption from wharfage dues and export tax, duty, impost and fees; tax credits; and additional deductions under labor expenses.
Last year, the BOI approved the granting of perks for GNPower’s P41.23-billion power project in Bataan.
AC Energy and GNPower announced in August 2013 that they were targeting to start the construction of the coal plant within the first half of 2014. This facility is among the power plants that are expected to go online over the mid-term to help ease Mindanao’s acute power supply shortage.
Gross power reserves in Mindanao stood at only 70 megawatts as Monday.
Mindanao is in dire need of baseload facilities as it relies heavily on its hydropower plants, which supply more than half of the island’s electricity requirements. This makes it highly vulnerable to weather conditions like prolonged drought.
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