Alternergy sets P20-B capex for RE projects
BY MYRNA M. VELASCO – March 14, 2023 3:40 PM
from Manila Bulletin
Alternergy Holdings Corporation, a pioneer in renewable energy (RE) development in the country, will shell out P20 billion worth of capital expenditures (capex) on projects under construction phases over the next three to five years.
According to Alternergy President Gerry P. Magbanua, the company is already advancing the commercial developments of onshore wind, solar as well as run-of-river hydro power projects that are mostly sited in the Luzon grid.
“For the entire group in the next 3-5 years, we’re looking at a total capex of P20 billion for the line-up of projects we have. Alternergy is embarking on a triple play strategy where we’re looking at developing run-of-river hydro, solar and wind projects,” he told reporters.
Across technologies, the targeted new builds will be 220 megawatts for onshore wind – primarily in Rizal province; 50MW hydro that are under development in Ifugao and Nueva Ecija; and greenfield solar ventures in Bataan and Palau in the Micronesia region will bring in additional 50MW for Alternergy’s RE platform buildup.
The aggregate capacity of the ongoing projects would be 300 to 350MW to account for a significant chunk of the company’s higher end target of 1,370MW within five-year stretch.
For the programmed capital spending, Magbanua indicated that the equity portion will account for 30-percent or roughly P6.0 billion; while the balance of 70-percent will have to be financed through loans and other financing instruments, like green bonds that may potentially raise P2.0 to P2.5 billion.
“We’ve done this many times in the past in our projects – usually 70-30; 70-percent funded by debt, 30-percent by equity. For the P20 billion (capex), the equity is around P6.0 billion,” he expounded.
He similarly fleshed out that the game plan of the company is to tap partners for each project that it will be pursuing; then Alternergy has to retain majority shareholdings in the resulting joint venture deals.
“For Alternergy, our mantra is not to own 100-percent of these projects, we’ll be inviting partners to participate in the equity structure of these projects. The goal is to have majority stake in these projects – at least 51-percent or 50-percent plus 1 share,” the company executive stated.
Onward to the firm’s debut at the Philippine Stock Exchange (PSE) this month, Magbanua conveyed that “there’s a number of interested parties who want to partner with us in other technologies. For example solar, there are several companies approaching to become partners with us.”
When it comes to the off-take (capacity purchase) arrangements, he specified that Alternergy’s approach will be a combination of bilateral supply contracts with power utilities; join the tendering process for the Green Energy Auction Program (GEAP) being administered by the Department of Energy; as well as position its hydro projects for the extended feed-in-tariff (FIT) incentives of the unsubscribed portion of the capacity set for this technology.
“For solar, the Palau project has 100-percent bilateral agreement. For Solana (in Bataan), 50-percent of capacity was already locked in; for the other 50-percent, we’re still talking to other potential off-takers, RES (retail electricity suppliers),” he noted.
On the company’s wind farm developments, he stated that these are lined up for the subsequent round of GEAP to be carried out by the DOE, “as there’s going to be another set of auction this year, so we expect to participate in that auction.”
