DMCI Power plans to invest $300 million for 100-MW hydropower

by Lenie Lectura – May 5, 2016

from Business Mirror

DMCI Power Corp. (DPC), a subsidiary of Consunji-led DMCI Holdings Inc., is pursuing a total of 100 megawatts (MW) of hydropower projects to expand its investment portfolio.

Investments in hydropower business could reach a conservative$3 million per MW, DPC President Nestor Davidas said.

Of the planned 100-MW, Davidas identified 90 MW of power-generating capacity that would be done in phases in Sultan Kudarat. The remaining 10 MW is being eyed in Cagayan de Oro (CDO).

Davidas said Landbank of the Philippines has agreed to provide partial funding for the hydro project in CDO.

 “Landbank funding is about P2 billion for CDO hydro project alone,” he said. DPC plans to make its foray into hydropower generation, as soon as results from various feasibility studies are completed.  Hydro projects, he commented, are “risky since the projects’ success largely depends on nature.”

“It’s bad if there is no water, but it’s also bad if there’s so much of it. In fact, one of the planned hydro projects already cost P2 billion.  It would wipe out our equity if we fail in this project. It’s too risky that is why the engineers from DMCI are closely studying the prospects,” Davidas said.

At present, DPC operates diesel and bunker power plants in Masbate, Palawan and Oriental Mindoro.  Davidas said DPC earmarked P1.2 billion in capital expenditures this year, up from P750 million
last year.

He said P450 million had been allotted for the 10-MW bunker plant in Palawan and another P450 million to finance its operations in missionary areas.

“Our growth area is mainly in Masbate. Mindoro comes next,” Davidas said.

To further expand its business, DPC continuously looks for opportunities through the bidding of National Power Corp. (NPC)-Small Power Utilities Group contracts and Power Sector Asset and Liabilities Management Corp.’s privatization of power-generation assets.

DPC earlier signed an agreement with NPC and Palawan Electric Cooperative Inc. (Paleco) to provide base-load/peaking power in response to the demand of the island.

DMPC also bagged a 25-MW supply contract from Paleco to construct a coal-fired power plant. However, this faced strong opposition from environmentalist groups and residents.