Meralco unit takes majority stake in coal plant jt venture

MANILA, Philippines - Meralco PowerGen Corp., a wholly-owned unit of Manila Electric Co., the country’s biggest power distributor, has signed a joint venture deal with New Growth B.V., a subsidiary of the EGCO Group of Thailand, to develop a 460-megawatt coal-fired power plant in Mauban, Quezon.

In a disclosure to the Philippine Stock Exchange yesterday, Meralco said under the deal, Meralco PowerGen would have a 51 percent stake in the project while New Growth would hold the remaining 49 percent.

The project’s cost is yet to be determined and will depend largely on final design, specifications and other terms determined during the engineering, procurement and construction (EPC) tender process, Meralco said.

Meralco said its board has approved a resolution authorizing Meralco PowerGen to execute a joint development agreement with EGCO for the new 460-MW super-critical coal-fired power plant of Quezon Power.

EGCO, which controls 98 percent of Quezon Power, is eyeing to complete the 460-MW expansion by 2016 or early 2017.

The Quezon Power project, an existing 460-MW coal-fired plant, commenced operations in May 2000 and provides stable and reliable electricity to the Luzon grid under a 25-year power sales agreement with Meralco.

EGCO is the first independent power producer in Thailand. It has around 16 operating plants with total installed capacity of 4,444 MW in Thailand.

Its agreement with Meralco for a new coal-fired power plant comes after it divested last month its stake in a joint venture project with Alsons Consolidated Resources Inc. of the Alcantara Group to pursue other investment opportunities in the Philippines.

In its announcement to the Thailand Stock Exchange last month, EGCO International Ltd., the wholly-owned subsidiary of EGCO, said it divested its  49-percent stake in Conal Holdings Corp., its joint venture with Alsons, which holds a 60 percent stake in the holding company, acquired EGCO’s 40 percent stake, bringing its stake in the power holding company to 100 percent.