Firm to build 2 coal-fired power plants in Mindanao

MANILA, Philippines—The Alcantara-led Conal Holdings Corp. is pushing through with plans to build two coal-fired power plants in Sarangani and Zamboanga to provide 300 megawatts in additional baseload capacity to these provinces within four to five years’ time.

Antonio Miguel B. Alcantara, financial analyst for parent firm Alsons Consolidated Resources Inc., said the additional capacity would be crucial come 2015 and 2016, when two of the company’s build-own-operate contracts are expected to expire.

Alcantara was referring to the contracts for the 100-MW diesel facility of Western Mindanao Power Corp. (WMPC) and the 55-MW bunker-fired power station of Southern Philippines Power Corp. (SPPC).

The state-run National Power Corp. serves as the buyer of the electricity generated by these two facilities. Once the contracts expire, these diesel plants are expected to become merchant plants that could provide ancillary services to the Mindanao grid.

“So these coal plants will replace the capacities of the diesel (plants),” Alcantara said.

Investments for the two coal-fired facilities may reach up to $700 million, of which $450 million would be the estimated cost for the Sarangani facility. Alcantara did not disclose investment figures for the Zamboanga coal plant but he noted that they may need to invest $2 million to $2.5 million to produce a megawatt of coal power. This means that for the 100-MW Zamboanga plant, Conal Holdings may have to spend as much as $250 million.

Aside from providing stable power supply on the island, the two proposed coal power plants are also expected to help strengthen the company’s foothold in the power market in Mindanao, particularly in central and western Mindanao, he added.

To prepare for the construction of the 200-megawatt coal-fired facility in Maasim, Sarangani, Conal Holdings will soon tap a consortium of local banks led by BDO to help finance the $450-million power project (SM 200).

Alcantara said they expect financial closure by June at the earliest, allowing the company to start construction by August or September this year. Conal Holdings has also wrapped up discussions with Daelim Industrial Co., Ltd. for the engineering, procurement, supply and construction (EPC) contract, he added.

“We already have our EPC contract in place and we’re finishing up with the power supply agreement with South Cotabato II Electric Cooperative, Inc. (Socoteco II). The plan is to embed ourselves into the Socoteco II area so (power consumers) do not have to pay for the P1.10 per kilowatt-hour transmission charge,” Alcantara said.

The first unit (100 MW) of the planned coal plant in Sarangani is expected to be completed by September 2013, while the second unit may be commissioned within the fourth quarter of 2014. For the first 100-MW unit, about 70 MW will be provided for Socoteco II, while the remaining 30 MW will be sold to the grid.

Conal Holdings also plans to develop a 100-MW coal-fired power plant (ZAM 100) in Zamboanga City. The power plant is expected to be completed within the fourth quarter of 2014. Once the ZAM 100 begins commercial operations, it can serve the electricity requirements of the other areas in the Zamboanga Peninsula.

Apart from coal projects, Conal Holdings is also developing renewable energy projects, particularly the 17-MW Siguil hydropower project, located also in Maasim, near its coal facility. Once completed, the Siguil plant will serve the requirements of General Santos City.

Conal Holdings earlier said it also has other renewable energy projects on the pipeline, which included the 30-MW hydroelectric power plant Kalaong River in Maitum, Sarangani, which is still being studied. It also has the 40-MW hydroelectric power project in Bago River in Negros Oriental and a planned 12-MW hydroelectric facility in Carol-an River, Negros Occidental.