PNOC to hike capacity of cogeneration project in Negros

The Philippine National Oil Co. (PNOC) will reevaluate the proposal of Bronzeoak Philippines and Talisay Bioenergy Inc. (TBI) to increase the capacity of the 30-megawatt (MW) bagasse-fired cogeneration project in Talisay, Negros Occidental to 35 MW.

"With the government’s renewed commitment to pursue renewable energy project, we will revisit the biomass project in Talisay," PNOC officer-in-charge Pedro Aquino Jr. said.

Aquino said the PNOC Board will have to re-assess the proposal as this will entail an increase in capital infusion of the state-owned oil firm.

Based on the proposal, the project cost will be increased from $60 million to  $75 million.

Under the old capital structure, PNOC is supposed to infuse 30 percent of the $60 million project while Bronzeoak will contribute 15 percent.

The remaining shares are supposed to be covered by other private investors. These were: Ponde Electric (20 percent); Fin Fund (25 percent) and Hawaiian Philippines (10 percent).

"First, we need to go back to the negotiating table (Bronzeoak consortium) as there would be a need to change the prior agreements (disbursement and development agreements)," Aquino said.

Aquino said they expect to finish the renegotiation of an agreement with Bronzeoak within the year.

"We have a mandate to push for renewable energy projects. Energy Secretary Raphael Lotilla is very keen on the speedy development of NRE projects," he said.

PNOC entered into a development agreement with the TBI and Bronzeoak Philippines in 2004, committing $6 million which is equivalent to a 30 percent equity in the project.

The state energy firm has already advanced $1.05 million for the project’s initial expenses.

The project aimed to establish a new, wholly-renewable, independently-financed, cogeneration station to export surplus electricity to the local distribution system .