BEIJING—Business magnate Alfredo Yao of the Zest-O group has hatched a partnership deal with Hong Kong-listed Energy China, the leading power engineering and construction firm in China, to invest more than $2 billion in a 1,200-megawatt coal-fired power plant in the Philippines.
In a chance interview with Inquirer, Yao said the proposed power plant project —which would be built somewhere in Luzon—would mark his group’s entry into the energy business.
The proposed power plant will be built in two phases with a capacity of 600 megawatts each. Yao said the initial phase would cost about $1 billion and the amount would go up to $2 billion, inclusive of the second phase.
Energy Secretary Alfonso Cusi said there were several energy deals signed during the four-day state visit of President Duterte to China (Oct. 18 to 21) and Yao’s partnership with Energy China was one of the major deals.
Based on estimates, Cusi said Yao’s total investment could reach more than $2 billion including the second phase of the project.
Industry sources estimated that the energy deals bagged in this trip, including those which were private sector-initiated like Yao’s, could sum up to more than $5 billion.
Yao said a joint venture firm would be created with Energy China owning up to 30 percent equity. His group would control the remaining 70 percent.
Asked why he made this decision to diversify into the power business now, Yao said: “There is a looming power supply shortfall in Luzon.”
In the past, Yao said it was difficult to pursue such big-ticket projects because “200 signatures were needed” to obtain permits. He expressed optimism that the Duterte administration’s pledge to cut red tape would be done to attract more investors into doing business in the country.
Based on its website, Energy China is one of the largest comprehensive solutions providers for the power industry in China and globally. It has capabilities across the full industry chain, especially in survey and design, consultancy, construction and contracting, equipment manufacturing, civil explosives and cement production, investment and other businesses.
One of Energy China’s biggest undertakings is the Three Gorges Project, the largest hydropower station in the world in terms of installed capacity.
In recent years, the company has been expanding its international business, completing China’s first overseas nuclear power project, Chashma Nuclear Power Plant (1×300MW) Project Phase I, in Pakistan and EREN SC coal-fired Power Plant (2×600MW) Project in Turkey.
Its Santa Cruz River Hydropower Station [which is under construction] is the largest project in Argentina and the largest overseas hydropower project undertaken by a Chinese company so far in terms of contract value.