Aboitiz Power seeks BOI perks for $500-M coal power plant

Aboitiz Power Corp. (APC), the power generation arm of the Aboitiz group, plans to apply for fiscal incentives offered by the government through the Board of Investments for its $500-million coal-fired power plant at the Subic Bay Freeport Zone.

APC is a wholly owned subsidiary of Aboitiz Equity Ventures Inc. (AEV) and Taiwan Cogeneration International Corp. (TCIC).

APC president Erramon Aboitiz said the two parties may jointly invest $500 million for the coal plant project. “We’re working on that. We came out with an announcement that we’re working with them about putting up a 300-megawatt coal plant in Subic.”

However, he pointed out that they are still firming out the schedule for the start of the construction of the power plant.

BOI-registered projects receive tax breaks such as income tax holiday and duty free importation of capital equipment.

The APC official said power demand for Subic alone is close to 40 megawatts and the company is still looking for other possible buyers of electricity nearby.

Based on the agreement, the two parties will engage in  ”building and operation of an independent coal-fired power plant and have agreed to form a joint venture company which will serve as vehicle for the implementation of the proposed Subic Bay coal-fired power plant.”

“(The coal plant) is initially 150 megawatts but a second unit can be added in the future,” Aboitiz earlier said.

The proposed Subic Bay coal-fired power plant is expected to supply electricity to Subic Bay Metropolitan Authority (SBMA) and other economic zones around the country. SBMA is anticipating a surge in demand from new locators such as Korean shipbuilder Hanjin.

TCIC will supply the coal plant’s electricity output to Subic Enerzone Corp. (SEZ), who was contracted to provide power distribution services to SBMA until 2028.

SEZ is a consortium composed of AEV, Davao Light & Power Co., Mirant Phils. and San Fernando Electric Light & Power Co. TCIC, a subsidiary of Taiwan Power Corp., is engaged in the project planning, design, purchase, assembly, construction, construction management and financial planning of cogeneration systems, acquiring fuels and related businesses.

SBMA administrator Armand Arreza earlier said TCIC’s investment will lower the cost of power in the area by at least P1 per kilowatt hour. TCIC would be selling electricity at P3.50 per kilowatthour, from the current P4.10 per kwh.