MANILA, Philippines - Aboitiz Power Corp. (APC) and its partners will push through with the expansion program for Steag State Power Inc.’s 232-megawatt coal-fired power plant at the Phividec Industrial Estate in Villanueva, Misamis Oriental.
Steag corporate communications officer Jerome Solvedilla said the expansion plan will likely be carried out in the last quarter of the year.
But he said the groundworks are now being prepared by the consortium to be able to complete the additional power facility by 2013.
“The partners are looking at groundbreaking for the expansion this year, towards the end of the year most likely,” Soldevilla said.
Aside from APC, the other members of the group are Evonik Steag GmbH of Essen, Germany and local firm La Filipina Uy Gongco Corp.
APC is the holding company for the Aboitiz Group’s investments in power generation, distribution, retail and power services. It is a major producer of renewable energy in the country with several hydroelectric and geothermal assets in its generation portfolio.
Evonik Steag GmbH is Germany’s fifth largest power generator.
The group earlier said they are looking at expanding the capacity of the coal-fired facility by 150 MW and will entail construction of a third unit next to the existing Steag power plants.
Under the proposed expansion plan, the group will create a new company for this purpose. The partners agreed to maintain their shareholdings in the same proportion at 51 percent for Evonik, 15 percent for La Filipina and 34 percent for APC.
Earlier, APC president and CEO Erramon Aboitiz said there is a need to put up new capacities in Mindanao as the area should be less dependent on hydroelectric plants.
Last year, Mindanao suffered up to eight-hour brownouts due to the negative effect of the El Niño weather disturbance to the hydro facilities which supplies more than 50 percent of the region’s power needs.
“This addition to Steag State Power is the logical way to achieve this. This project assures Mindanao of reliable and cost-effective power to fuel its continued economic advancement,” Aboitiz said.
The new power plant will be cost effective as this will use the existing facilities such as the jetty, coal handling facilities and stockyards and the 138-kV interconnection. The power to be generated from the power plant will be sold to interested utilities or industries.
The group is most likely to spend about $600 million for the expansion, using the rule of thumb of about $1.5 million to $2 million per MW.