PNOC, British power firm tie up for $57-M project

The Philippine National Oil Co. (PNOC) will enter into a developmental agreement with British power firm Bronze Oak Group Ltd. for a $57-million (P3.1 billion) co-generation project in Negros Occidental.

PNOC president Thelmo Cunanan said the amount will cover the construction of a 30-megawatt (MW) bagasse co-generation power plant.

He said PNOC has signed a memorandum of agreement with Talisay Bioenergy Inc. (TBI), formed in July 2003 to develop, construct, operate and own the co-generation plant.

The project will also be done in cooperation with First Farmers Holding Co. (FFHC) which is owned by 747 sugarcane farmers/stockholders.

FFHC has been operating for 40 years and has been identified by the National Government as the only profitable farmer-owned mill in the country.

TBI, on the other hand, is a Philippine-registered company owned by a single shareholder-Bronze Philippines Inc. – which in turn, is owned equally by local firm Zabaleta & Co. and the Bronze Oak Group.

According to Cunanan, PNOC is currently drafting the terms of reference of the agreement and is expected to finish the draft anytime this month.

"We will be able to present the draft to the PNOC board within this month," the PNOC chief said.

PNOC will shoulder 30-percent equity share in the project or $5.1-million (P282.6 million). The Bronze group, meanwhile, will take up the remaining project equity.

The construction of the power plant will start on September and will be completed in 24 months, or by August 2006.

The project area has a dedicated cane supply important in the operation of the power plant. In 2002-2003, FFHC produced 947,000 bags of sugar and 885 tons of cane.

The mill is also located in an area where competitive electricity can be sold to the Central Negros Electric Cooperative Inc. (Ceneco). Ceneco is expecting a franchise energy peak demand of 90 megawatts (MW) by 2006.