Aboitiz arm to build P2.86-B hydropower plant in Davao

Hedcor Tamugan Inc., a wholly-owned subsidiary of Aboitiz Equity Ventures Inc. (AEV), will build a P2.863-billion hydro electric power plant in Davao del Sur.

The Tamugan hydropower project is a renewable energy project that will convert the hydraulic potential of the three rivers into electricity. The project will be operational by March 2010.

The hydropower project will produce clean electricity from a renewable source without constructing a dam or impounding reservoir. Since it is powered by water, there is no need to burn scarce fossil fuels. As a result, the activity will only have minimal environmental impact.

Hedcor’s activity is in line with energy-power generation utilizing indigenous and renewable energy such as biomass, waste to energy conversion, solar, wind, geothermal, hydro and tidal wave.

Last month, another AEV unit Davao Light and Power Co. Inc. (DLPC), the electricity utility operator in Davao, selected Hedcor as the preferred bidder for a power supply contract. DLPC is the third largest privately-owned power utility in the country after Meralco and the Visayan Electric Co.

The project supports the government’s thrust to encourage the private sector to build the new capacities that will be required in Mindanao by 2010. It is expected to help the government in its initiative to ensure energy self-sufficiency and security.

The increase of power distribution activity is expected to generate brisk business activities in the region, spur the economy and uplift economic condition in the countryside.

Because the project is a hydro plant, fuel importation will not be necessary, thus saving the government almost 170,000 barrels of oil.

The power utility earlier conducted a bid evaluation for the supply of its incremental load requirements starting Aug. 29, 2007.

The Hedcor consortium had won the bidding with an offer price of P4.0856 per kilowatt hour for the supply contract to DLPC for 400 million kwh of electricity that will run for 12 years.