Meralco-led group seeks to raise up to P40B

A consortium composed of power distributor Manila Electric Co., Aboitiz Power Corp. and Taiwan Cogeneration Corp. plans to raise between P35

billion and P40 billion in the first half of next year to finance its proposed 600-megawatt coal-fired power plant in Subic.

Meralco chief operating officer Oscar Reyes said the group, through Redondo Peninsula Energy Inc. (RP Energy), was in talks with banks for a syndicated loan facility.

“We may not use (the whole amount right away), but we will have to arrange the entire amount early next year. The borrower may be the project company,” Reyes said.

Reyes noted that despite the protests lodged against the proposed coal facility, RP Energy was still inclined to pursue the project, as the country, specifically Luzon, would need the additional capacity soon.

RP Energy expects to start generating the first 300 MW of power by 2014 and the remaining 300 MW, the following year.

According to Reyes, RP Energy has already secured an environmental compliance certificate for the first 300-MW unit of the plant, and is now working on getting another ECC for the second 300-MW unit.

RP Energy expects to sell part of the plant’s output to Meralco, the country’s biggest power distributor, although this has yet to be negotiated by the parties and approved by the Energy Regulatory Commission.

Energy Secretary Jose Rene D. Almendras earlier admitted that coal would continue to play a major role in the country’s energy mix until the government could find better and relatively cheaper alternative sources. Coal facilities are deemed critical to ensure the country’s energy supply.

Meralco, through subsidiary Meralco PowerGen Corp., is the controlling shareholder of RP Energy with 50 percent plus two shares, while APC, through subsidiary Therma Power Inc., and Taiwan Cogeneration own the remaining shares equally.

“Meralco’s entry into power generation is part of an overall strategy to ensure that our customers obtain efficient, reliable and adequate electricity at competitive rates. This investment is timely, given growing concerns about the availability of sufficient power supply in the coming years,” Meralco president and CEO Manuel V. Pangilinan earlier said.

Meralco is expected to finance half of the 30-percent equity portion of the $1.28-billion project cost. The 70 percent will come from project financing.