Suez-Tractebel plans several investments in RP power sector

The acquisition of the 600-megawatt (mw) Calaca coal-fired power facility in Batangas is expected to jump-start investments by Belgian power giant Suez-Tractebel in the Philippine energy sector, a top company official said.

Suez Energy International chief executive officer Dirk Beeuwsaert said their $786.527 million bid for the Calaca facility is just the start of its exploration into the Philippine market.

“It will serve as a solid base for a further development of a diversified generation portfolio, including in geothermal and hydro, all of which show interesting potential in the Philippines,” Beeuwsaert said in a press statement.

“Our first investments here will result in improved performance and reliability of the Calaca installations,” he added.

The Calaca facility is Suez-Tractebel’s first investment in the Philippines.

Suez-Tractebel has long been interested in investing in the Philippine power industry but it is only through the Calaca power plant bidding that the company was able to enter the industry.

The Calaca power plant has two pulverized coal-fired generating units generating 300-megawatts (mw) of capacity each. The plant includes an offshore coal unloading jetty and unloading facilities.

Power Sector Assets and Liabilities Management Corp. (PSALM) vice president Froilan Tampinco said in earlier interviews that Suez-Tractebel representatives were open to the idea of the power plant expansion.

Suez-Tractebel, Belgium’s top utility holding company and one of the world’s top independent power producers (IPPs), through its corporate vehicle, Calaca Holdco Inc. (CHI) was the highest bidder for the Calaca facility during the Oct. 16 bidding. CHI is owned by Suez-Tractebel through its wholly-owned subsidiary Belgelectric Finance B.V.

PSALM president Jose Ibazeta said the agency has other “deliverables to accomplish” before the notice of award can be given to Suez-Tractebel. “We are expecting the 40-percent down payment for Calaca. They actually have an option to close earlier.”

With the strong investor interest for Calaca, Ibazeta said he is optimistic that they can hit the 50-percent privatization target by the end of the year. Total privatization proceeds are estimated to reach $800 million for the whole year, excluding proceeds from the bidding of the 25-year concession contract of the National Transmission Corp.

Of the 31 plants of the National Power Corp. (Napocor) identified for privatization, 10 plants have already been disposed, equivalent to 1,680.5 mw operating capacity, or 38.76 percent of the 4,335.70-mw aggregate capacity of all generating plants in Luzon and the Visayas.

Also in the auction block are the 192.5-mw Palinpinon Geothermal and 146.5-mw Panay diesel power plants by Dec. 5. It is also bidding out the 175-mw Ambuklao-Binga hydroelectric power in Benguet and the Manila thermal power facilities.