Eastern Petroleum budgets P4B for biomass project
THE EASTERN Petroleum Group is getting funding for a P4.15-billion biomass project, aiming to operate its completed facility by the middle of 2018.
Of the P4.15 billion, 30 percent or P1.2 billion will come in the form of equity, which has been “committed and substantially secured,” Eastern Petroleum Group chair Fernando Martinez said in an interview. The rest will be funded with loans from local and foreign banks.
The project vehicle, Caraga Renewable Power Corp. (CARE Corp.), is leading all the work to secure funding, Martinez said. Funding, including loans, is expected to be finalized by June 30 this year, he said.
The total budget covers provisions for loan interest and initial operational costs. Preparatory work is in the advanced stages, Martinez said.
“We’re done with land development and 70 percent of pre-development activities like ECC (environmental compliance certificate), grid impact and interconnection studies. The EPC (engineering, procurement, and construction) contract will soon be awarded and negotiated to meet expected commercial operation by the second quarter of 2018,” Martinez said.
The Department of Energy has validated the firm’s proposed project and has given permission to go ahead with preparations, he said.
Eastern Petroleum is engaged in fuel distribution and retail sales but it intends to diversify by going into biomass power generation.
At least the first 25-megawatt (MW) phase of the project in Butuan City, which is seen to boost the electricity-starved Mindanao grid, will be developed with Wellons Inc. Fernandez said his site tours with Wellons in Canada and the United States showed that the North American company’s biomass power technology promised 25 percent lower production cost than oil based and pollution emitting plants.
Feedstock for the biomass plant will come from wood chips from an industrial plantation of fast-growing trees in Agusan del Norte and Agusan del Sur. Planting has already started at a plantation managed by a separate company under the joint venture of CARE Corp. and the Manobo council Wawa Tribal community in Agusan del Sur, Martinez said.
Wellons Inc. is a North American firm specializing in the design, manufacture and turnkey installation of biomass and gas fired thermal energy systems. The company provides complete services in design, engineering, and manufacturing, as well as installation services and technical assistance.
DOE data show that about half of fuel inputs for power generation in the Philippines comes from renewable energy, mostly from hydropower. The country wants to triple its R.E. capacity by 2030 to curb its dependence on traditional and sometimes pollutive energy sources such as coal.
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