Alsons sets aside P1.2 billion for Iligan diesel power plant

MANILA, Philippines - Mindanao-based energy firm Alsons Consolidated Resources Inc. (ACR) is ready to spend around P1.2 billion for the Iligan diesel plant.

ACR wants to rehabilitate the power plant while working at new power projects to increase available electricity in the Mindanao grid, an official said.

The energy firm is looking at completing its purchase of the Iligan diesel plant for P300 million and spending P650 million for repairs, said ACR executive vice-president Tirso G. Santillan Jr.

“The P650 million is only for the rehabilitation. We also have operational requirement because before, fuel was supplied by the National Power Corp. (Napocor) but now we have to supply the fuel,” Santillan said.

Furthermore, acquisition of the adjacent lot and purchase of a fuel tank from Napocor will bring the total project cost to P1.2 billion, Santillan said. 

The 100-megawatt (MW) Iligan diesel power is being targeted by the government to help lessen the supply shortfall in Mindanao.

The Mindanao grid, which needs an average of 1,300 MW daily, lacks an average of 50 MW to 300 MW, resulting in two to four hours of rotating brownouts since January, data from the National Grid Corp. of the Philippines showed.

For ACR, the power plant will increase revenues in the long term.

The plant, which was last operated in 2010, was sold to ACR subsidiary Conal Holdings Corp. after it was acquired by the local government due to a tax delinquency. 

However, the power plant also needs clearance from the Commission on Audit before it resumes operation.

“Our contract is with Iligan City to buy it, not to lease it,” Santillan said.

To date, the diesel power plant is only capable of producing 30 MW given its deterioration, Santillan said.

ACR can increase output to 105 MW in six months after its takeover of the Iligan diesel power plant, Santillan said, adding that funding will come from reserve cash of the company.

Last year, earnings of ACR surged 20 percent to more than P456 million from P378 million in the previous year on the back of higher energy sales. To date, the company has a total generating capacity of 155 MW.z

ACR is banking on the acquisition of a diesel-fueled power plant in Iligan to further increase profits this year.

ACR’s energy and power businesses are held by Conal Holdings, Mapalad Power Corp. (MPC), Sarangani Energy Corp. (SEC), Alsing Power Holdings, Inc., Alsons Power Holdings Corp., (APHC), Northern Mindanao Power Corp., and Alto Power Management Corp.