APC Group needs $300 million for geothermal power plant

MANILA, Philippines - Listed holding firm APC Group Inc. said it would need around $300 million, majority of which would be provided by its foreign partner to initially build a 100-megawatt power plant in Kalinga-Apayao.

In a phone interview, APC senior vice-president and chief finance officer Bernardo Lim said the company is now in the process of finalizing an agreement with a foreign partner, which he declined to divulge due to a confidentiality agreement.   

Lim, however, said the foreign entity, which would develop and operate the project, will shoulder the bulk of the cost. “We’re still working on the details of the joint venture. Hopefully, we’ll have something by the end of the month,” he said.

The foreign partner, which is rumored to be a unit of US energy behemoth Chevron Corp., will be taking in a 60-percent stake in the joint venture while the balance of 40 percent will be shared by APC’s wholly-owned subsidiary Aragorn Power and Energy Corp. and local firm Guidance Management Corp.

In September 2008, the joint venture between Aragorn Power and GMC  was granted a geothermal service contract covering a 26,250-hectare area in the provinces of Kalinga and Apayao in Northern Luzon.

Lim said while the area has the potential to produce up to 200 MW, the venture would initially involve the construction of a 100-MW geothermal plant.

The Philippines is the largest producer of geothermal energy in Asia despite its miniscule size compared with some of its very large neighbors. According to the International Geothermal Association (IGA), the Philippines ranks second only to the US in the production of renewable clean energy.

Aside from this, the Philippines reportedly has total estimated untapped geothermal resources equivalent to approximately 2,600 MW.  It has an installed geothermal capacity of  more than 1,900 MW and wants to raise this to 3,131 MW by 2013.

Geothermal power currently accounts for around 18 percent of the energy needs in the Philippines.

EDC, which generates power from volcanic springs, is currently the largest geothermal company in the Philippines, controlling more than 60 percent of the country’s installed geothermal capacity.