Smith Bell, Danish partners to raise $110M for Negros wind farm proj

Filipino-owned Smith Bell Group of Companies and Danish firm Global Renewable Energy Partners will raise $110 million for the second phase of its San Carlos Wind Farm project in Negros Occidental.

Smith Bell and Global Renewable Energy Partners earlier put up the Carlos Wind Power Corp. in 2003 to undertake the development and implementation of the 30-megawatt (Phase I) San Carlos wind farm project.

Smith Bell president Ruth-Yu Owen said that as the company is nearing financial closure for Phase I of its San Carlos wind farm project, it now wants to develop a bigger 60-MW wind farm facility, also in Negros Occidental

"We’re eyeing phase two in another town but it will be bigger, twice the size of our current facility," Owen said. She said Phase II of San Carlos will start either in 2008 or 2009.

Owen said the company expects to close financing for Phase I by 2006.

It is tapping the Danish International Development Agency (Danida) by next year for the bulk of its financing requirements for Phase I which will cost a total of $55 million.

Danida is the same agency that bankrolled the construction of the country’s first wind farm in Bangui Bay, Ilocos Norte.

Phase I of San Carlos project straddles the three peaks of Mount Malindog, Brgy. Prosperidad and Linubagan. Construction is slated early next year.

The wind farm will have 19 to 24 turbine generators each with a capacity of 1.5 to 2 Megawatts.

Owen said that once completed, the wind farm will enable the company to provide cheaper electricity to consumers. Currently, renewable energy projects such as wind power are not subject to the expanded value added tax (EVAT).

The company started to study wind speeds in San Carlos City, Negros Occidental in recent years. The study show expected gross generation of between 75-80 million kilowatthour per annum, which is equivalent to the consumption of around 150,000 households in the country.

The wind project is part of Smith Bell’s drive to develop renewable energy sources to reduce the country’s reliance on imported fossil fuels such as coal and oil.

At the same time, it will boost the country’s commitments under the Kyoto Protocol to reduce the emission of greenhouse gases.

The Philippines has a potential wind power of 76,600 MW which is even higher than known wind power producing countries like Germany (14,000 MW potential wind power), Spain and US (6,000 MW each), Denmark (3,000 MW) and India (2,100 MW).

As part of efforts to accelerate the development of renewable energy sources, the Department of Energy earlier announced plans to hold the second contracting round for 18 wind sites nationwide.

Energy Secretary Raphael M. Lotilla said the new wind sites being offered will have a total capacity of 500 MW.

The new wind sites are in Bani, Pangasinan (40 MW), Bolinao, Pangasinan (40 MW), Dinapigu, Isabela (10 MW), Cuyo Island, Palawan (30 MW), Tagaytay, Cavite (30 MW) Donsol-Jovellar, Sorsogon (70 MW), Donsol, Sorsogon (40 MW) Pilar, Sorsogon (40 MW), Matnog, Sorsogon (10 MW), Pandan, Catanduanes (30)MW, Dumangas, Iloilo (50 MW), Siquijor (10 MW), Carmen, Cebu (20 MW), Oslob, Cebu (30 MW), Allen-Lavezares, Northern Samar (10 MW) Tomas Oppus, Southern Leyte (10 MW) and Gigaquit, Surigao Del Norte (30 MW).

Currently, the country’s first and only wind farm to date was developed by Northwind Power Development Corp. in a 40 percent Danish, 60 percent Filipino partnership.

The 25-MW Northwind Bangui Bay Project is also a landmark development for our country since it became the first participant in the global carbon market. Another wind project in the pipeline is a 40-MW wind farm also in northern Luzon

The project financing was provided by Danida, the Danish government aid organization that granted $11.2 million in capital to jumpstart the project and another $8 million in grants for its completion.

An export credit facility of $29.35 million was arranged under a loan agreement bet-ween the Northwind Power, the Trade and Investment Development Corp. of the Philippines, ABN AMRO Bank NV and the Danish Export Agency.

Last year, the DOE launched 16 wind sites and the first contracting round was held last March of which five were already issued pre-commercial contract. Several companies have also expressed interest for the next 11 sites.