Transco eyes foreign funds for 800-MW Leyte-Mindoro interconnection project

The National Transmission Corp. (TransCo) is looking at the possibility of tapping multilateral creditors to finance the 800-megawatt (MW) Leyte-Mindanao interconnection project (LMIP).

"We are trying to tap a pool of funds from various sources such as the Japanese government and Japanese private power companies, the Asian Development Bank and the World Bank," TransCo president and CEO Alan T. Ortiz said.

Ortiz said he had also approached Japanese power firms Kanematsu and J Power Systems Inc. on the feasibility of venturing into the LMIP.

He said the LMIP is an important component in completing the country’s transmission link-up to get ready for the open access scheme.

The LMIP, he added, is also crucial in the delivery of geothermal power from Leyte to other parts of the country.

TransCo has been convincing government authorities to reconsider their position on the LMIP. "Some sectors still find it expensive and it should not be given priority.  But we at TransCo believe it is an important project to complete the transmission loop," Ortiz said.

He said this project is also necessary for the implementation of the wholesale electricity spot market (WESM) in Mindanao.

"The energization of Leyte-Cebu interconnection project made it possible for the WESM to start its pilot project.  They also want to implement it for Mindanao, which reinforces my position for Leyte-Mindanao," Ortiz said.

TransCo had earlier proposed the speeding up of the implementation of the LMIP to 2008 from the earlier scheduled 2011 to help avert an imminent power shortage in Mindanao.

The government decided to defer the implementation of the P18- billion interconnection project in 2002 due to financial constraints. But TransCo said it will conduct another feasibility study to encourage the government to push through with the project.

According to Ortiz, they have to update the study on the project to look for ways to justify their proposal. "We need to update the previously done studies brought about by the very recent development which is the clamor for power supply. Mindanao totally depends on the Agus hydropower plant there. We believe that an additional implementing power source is necessary and inevitable."

Since the initial problem involved financing, he said they will try to explore the use of various financing schemes such as tapping multilateral creditors, combination of government and private sector loans, term facility and project financing.

Aside from helping solve the power shortage problem, TransCo said the possible acceleration of LMIP is consistent with the objective of the Electric Power Industry Reform Act (EPIRA).