Team Energy Corp. of Japan and Aboitiz Power Corp. on Thursday launched the $976 million (roughly P43 billion) Pagbilao 3 coal-fired power facility in Quezon province, which will add 420 megawatts to the Luzon grid by 2017.
The formal launch, which signaled the official start of construction, was led by President Aquino, who highlighted the significance of the power project in helping shore up power supply in Luzon by 2017.
The Pagbilao 3 power project will be spearheaded by Pagbilao Energy Corp. (PEC), a partnership between TPEC Holdings Corp. and Therma Power Inc., which are wholly owned subsidiaries of Team Energy and AP, respectively.
The 420 megawatts (MW) to be generated by the project, which is targeted for completion by November 2017, will add to the 735-MW capacity of the two existing coal power units at Pagbilao.
The output of the new generating unit can service the needs of distribution utilities, large scale industrial and residential users in Luzon, where energy demand is seen to grow rapidly in the coming years.
“The partnership between Team Energy and Aboitiz Power is a response to the call of the administration of President Aquino for private sector support in boosting the country’s energy security. As government has made great strides in moving the economy forward, we foresee significant growth in energy demand in the coming years,” said Federico E. Puno, president and CEO of Team Energy, a partnership between Japanese firms Marubeni Corp. and Tokyo Electric and Power Corp.
Mamoru Sekiyama, vice chair of Marubeni, noted that once completed and fully operational, the Pagbilao 3 would produce “reliable and affordable energy to empower homes and industries and to create opportunities for innovation and reinvention” in the Philippines.
“Pagbilao 3 is a testament to our faith and confidence in the Philippine economy and our good partnership with the Filipino people,” Sekiyama said.
Apart from helping secure power supply by 2017, the establishment of PEC is also expected to “significantly contribute to government coffers through additional taxes to be paid to the national, provincial and local government units,” said Tepco president Naomi Hirose.
To fund the project, PEC earlier signed an omnibus agreement to finance the construction of the Pagbilao unit 3. The P33.3-billion debt financing was arranged by BDO Capital and Investment Corp., BPI Capital Corp. and First Metro Invesment Corp., which served as joint lead arrangers. SB Capital Investment Corp. served as co-lead arranger for the project, while PNB Capital and Investment Corp. and China Banking Corp. were the co-arrangers. Philippine Savings Bank is also participating as a lender to the project.