THE POWER generation arm of the Manila Electric Co. (Meralco) and the wholly-owned subsidiary of Electricity Generating Public Co. Ltd. (Egco Group) of Thailand have started building a critical 500-megawatt coal-fired power project in Quezon province.
In a project update, Meralco PowerGen Corp. (MGen) said its project vehicle with Egco’s New Growth BV held the groundbreaking ceremony on Dec. 10.
Located in Mauban, Quezon, the power plant is considered critical since it will provide the baseload supply needed to serve electricity consumers in Luzon. The power plant will play a crucial role as electricity demand grows, especially in Luzon, which accounts for about 70 percent of the country’s gross domestic product.
Meralco, the country’s largest distribution utility, has signed on to buy the power station’s energy output under a 20-year power supply agreement that was approved by the Energy Regulatory Commission earlier this year.
The power plant’s tariff is considered one of the most competitive for new capacities that have yet to go on stream. The power plant is expected to begin operations in the first half of 2019.
San Buenaventura Power Ltd. Co. (SBPL), the project’s corporate vehicle, tapped the consortium of Daelim Industrial Co. Ltd. of South Korea and Mitsubishi Corp. of Japan as the engineering, procurement and construction contractor (EPC) for the project. It claims to be the country’s first power plant to utilize state-of-the-art technology.
The development of this project represents MGen and Egco Group’s commitment to contribute to efforts of attaining energy security. This is also aligned with MGen’s goal to have a power generation portfolio of about 3,000 megawatts.
SBPL entered into an omnibus agreement with a consortium of reputable local banks to provide a P42.15-billion loan for the project.
The company on Nov. 27, 2015 held the ceremonial signing for the project funding, the biggest all-peso project finance facility in the country to date.
The senior-term loan lenders are: BDO Unibank Inc., China Banking Corp. (Chinabank), Metropolitan Bank & Trust Co. (Metrobank), Philippine National Bank (PNB), and Rizal Commercial Banking Corp.