Alsons seeks financing for Mindanao power plant

SCREENGRAB from www.alsonspower.com

The Alsons Power Group has taken a step closer to implementing its latest proposed power plant in Mindanao as it works on getting financing for the project.

The Energy Regulatory Commission (ERC) has approved the Power Sales Agreement (PSA) between the Zamboanga City Electric Cooperative, Inc. (Zamcelco) and the Alsons group’s San Ramon Power Inc. (SRPI), which is undertaking a 105-megawatt (MW) power plant project in Zamboanga City.

With the approval of the PSA, the developers now face the challenge of getting project financing for the 105-MW SRPI plant project, said Joseph Nocos, VP for project development.

The usual process of securing financing for a major power plant project requires that the distribution utility—in this case, Zamcelco—be financially viable, Nocos said.

However, Zamcelco is undergoing financial difficulties, and unforeseen events such as the 2013 siege in Zamboanga City have aggravated its situation, he explained.

The Alsons group expects to begin construction of the SRPI plant in the second half of 2015. Commencement of operations is set for end-2018.

Presently, Zamcelco is currently taking several steps on its own to enhance its operating efficiency and financial viability. Zamcelco is apparently seeking an experienced and professional power distribution company that will finance and manage its franchise.

According to sources, the distribution utility is considering competitive bidding to find a partner that will help finance and manage operations of the distribution utility.

“We fully support these initiatives as Zamcelco’s financial viability is a key prerequisite for SRPI to achieve financial closing and commence construction.

The enhancement program of Zamcelco is expected to be completed within the first half of 2015,” Nocos said.

In the meantime, the power firm is in talks with Zamcelco on how to secure supply of interim power for Zamboanga City while awaiting the completion of the SRPI power plant.

Alsons Power subsidiaries are in a position provide interim power to Zamboanga City. These are the 100-MW Western Mindanao Power Corp. diesel plant in Sangali, Zamboanga City, the 103-MW Mapalad Power Corp. Iligan Diesel Power Plant and the 210-MW Sarangani Energy Corp. coal fired plant in Maasim, Sarangani province.