President Arroyo’s economic recovery program received another much-needed shot in the arm yesterday as Malacañang announced the joint venture project between the Taiwan Cogeneration Corp. (TCC) and Aboitiz Power Corp. (APC) to invest $420 million in a 300-megawatt coal-fired power plant in Subic.
The joint venture to be named Redondo Peninsula Energy (RP Energy) would start development of the power plant next year.
Meanwhile, Hanjin Heavy Industries and Construction (HHIC), a Korean shipping firm, has declared its intention to expand its shipbuilding operations in the Philippines.
RP Energy officials led by APC’s Luis Miguel Aboitiz and Jon Aboitiz and TCC’s president Brian Hsu, vice president Henry Wu and project manager Sean Chen paid a courtesy call on the President last Friday to announce their investment plans.
Also present were Energy Secretary Angelo Reyes; Ed Pamintuan, chairman of the Subic-Clark Alliance for Development Council, and Subic Bay Metropolitan Authority administrator Armand Arreza.
RP Energy officials revealed that the investment would double to $840 million once Phase 2 of the project is completed.
The two phases combined would bring the power plant’s capacity to 600 MW.
The project is aimed at partly addressing a projected power supply shortage of 1,950 MW on the main island of Luzon.
Despite the government’s goal of raising the country’s reliance on biofuels sourced from locally produced plants and oils, the Philippines is increasingly turning to coal to meet its power needs.
Earlier this week, the power unit of the Philippines’ largest bank, Metropolitan Bank & Trust Co., signed two deals worth $500 million with Taiwan’s Formosa Heavy Industries to build coal-fired power plants in central Philippines.
Another group, GN Power Ltd Co., a joint venture between American and Nauru investor groups, is currently building a 600-MW clean coal-powered plant worth $822 million in northwestern Bataan and hopes to operate the facility by 2010.
RP Energy officials said the power project would be operational by 2011, when the country is projected to experience a power shortage if no new power plants are developed.
“If no new plants are built, there will be a power shortage by 2011,” Luis Miguel Aboitiz, vice president of Aboitiz Power, said.
According to Aboitiz, their circulating fluidized bed technology is clean and environment-friendly and is guaranteed to easily pass the national emission level standards.
TCC officials also expressed appreciation for the government’s support for the project.
“We believe the (Philippine) economy has entered a stage of steady and robust growth under your Excellency’s leadership and we are very comfortable with the prospect of our project,” the officials told the President.
In an interview over dzRB, Presidential Management Staff director general Cerge Remonde said HHIC intends to build a shipyard, the magnitude of which is even bigger than what it established at the Subic Bay Freeport earlier this year.
Remonde said HHIC’s regional director Shim Jeong Sup revealed the company’s expansion plan to him after a courtesy call at the Palace last Friday.
He said the shipbuilding facility would be located somewhere in Misamis Oriental near Cagayan de Oro City.
No other details were revealed about the plan, except that it would be bigger than the Subic facility.
The Subic Bay Freeport Zone facility of HHIC brought in $1 billion to the country last year and an additional $684 million earlier this year as part of the firm’s expansion activities.
Mrs. Arroyo previously stated that the Subic shipbuilding facility of HHIC could be considered as one of the four largest in the world.
Aboitiz said APC plans to raise equity and debt to fund the first phase of the power plant to be built in the Subic Bay Freeport Zone, which formerly hosted the biggest US military base outside the United States.
APC, which conducted the biggest IPO this year, bought the country’s largest hydropower plant – the 360-MW Magat plant – for $530 million last year.
It plans to bid for a 60 percent stake in geothermal firm PNOC-Energy Development Corp., which the government is selling on Nov. 21.