Delays hit supercritical coal power plant
By Lenie Lectura – May 2, 2018
from Business Mirror
THE construction of the country’s first coal-fired power plant to use supercritical technology has been stalled by a few months, an official of Meralco PowerGen Corp. (MGen) said.
San Buenaventura Power Ltd. Co. (SBPL), a partnership between MGen and New Growth BV, a wholly owned subsidiary of Electricity Generating Public Co. Ltd. (Egco Group) of Thailand, is putting up a 455- megawatt (MW) coal-fired power plant in Mauban, Quezon. SBPL is at month 28 of the 42-month construction period.
The overall progress of the engineering, procurement and construction (EPC) work is estimated at 84-percent complete as of March 31.
However, MGen President Rogelio Singson said the power project is experiencing delays in construction.
“We are now possibly looking at two- to three-month delay because of late turnovers,” Singson said.
One of the reasons Singson cited was the EPC contractor did not anticipate adverse weather condition in the area.
“Like last December, we only had two three-working days. So we were having difficulty,” he said.
In addition to that, Singson cited “issues with the LGU [local government unit] on the commercial operation date.”
Also, SBPL’s coal power project is near an existing coal power facility of Quezon Power Philippines Ltd. Co.
“There is an existing power plant, Quezon Power. There are structures underneath that we must avoid in order not to hit existing lines. So, it’s also quite a challenge and a difficult situation,” Singson explained.
Still, SBPL is confident it can finish the project within the programmed time frame.
The facility’s planned commercial operations date is mid-2019.
SBPL tapped the consortium of Daelim Industrial Co. Ltd. and Mitsubishi Corp. as the EPC contractor for the project. Singson said Daelim officials are in the country to resolve as quickly as possible the delays being encountered.
“At the end of the day, MGen and Daelim want to make sure they will complete the project as soon as possible. Nobody wants any damage on both sides,” Singson said.
The electricity to be generated by the plant will be sold to Meralco, the country’s largest distribution utility, under a 20-year power-supply agreement. Singson said this project would bring in additional revenues to Meralco in 2020.
The SBPL power plant will play a crucial role as electricity demand grows, especially in Luzon, which accounts for about 70 percent of the country’s gross domestic product.
The development of this project represents MGen and Egco Group’s commitment to contribute in efforts to attain energy security, which will ultimately benefit the Philippine economy.
This is also aligned with MGen’s goal to have a power-generation portfolio of about 3,000 MW and significantly contribute to the growing demand for power.
SBPL earlier entered into an omnibus agreement with a consortium of reputable local banks to provide a P42.15-billion loan for the project. This is the biggest all-peso project finance facility in the country to date.
The senior-term loan lenders were BDO Unibank Inc.; China Banking Corp. (China Bank); Metropolitan Bank & Trust Co. (Metrobank); Philippine National Bank (PNB); and Rizal Commercial Banking Corp. (RCBC).
BDO Unibank – Trust and Investments Group served as the loan facility agent, while Metrobank—Trust Banking Group acted as collateral trustee.
Meanwhile, BDO Capital & Investment Corp. and First Metro Investment Corp. were appointed as joint bookrunners and joint issue coordinators. Together with China Bank, PNB Capital and Investment Corp. and RCBC Capital Corp., they also acted as joint lead arrangers for the transaction.
