PNOC unit allots $550 million for 11 hydro power plant projects

MANILA, Philippines – The PNOC-Renewables Corp., the renewable energy unit of state-owned Philippine National Oil Co. (PNOC), expects to spend more than $550 million to put up 11 hydroelectric power plants.

The 11 projects, once completed, will have a total capacity of about 276 megawatts.

PNOC-RC president Pete Maniego said the costs for these projects are still being firmed up.

“We are now preparing detailed cost estimates for each project based on our pre-feasibility studies and work programs,” he said.

Maniego said they would also be tapping a number of investors to undertake the proposed mini hydro projects.

“We are also finalizing info memo and project profiles for investors,” he said.

He said several local and foreign companies signed a memorandum of understanding (MOU) expressing their interest to partner with the company.

Maniego does not want to reveal the names of the prospective investors.

“It might be premature to reveal their names now. I dont want to preempt their finance and project approval process. But we will have local and foreign partners lined up for our 11 hydro projects,” he said.

Maniego said they expect to finalize the deal with these investors in the next few weeks.

“We will sit down with them within the next few weeks for their share in the equity and project costs,” he said.

The 11 projects will be located Benguet, Oriental Mindoro, Negros Oriental, Kalinga, Isabela and Iloilo.

PNOC-RC, being state-run., will take the lead in the RE development, there are a lot of existing power generation companies that have signified interest to engage in developing RE sources.

Aside from PNOC-RC, other firms that have already expressed interests in RE projects are: First Gen Corp., Aboitiz Power Corp., Trans-Asia Power, Energy Development Corp., Suweco, Constellation Corp., Oriental Energy, Green Power Philippines, Deep Ocean Philippines, Norasian Corp., and Philcarbon.

“Many have submitted their letters of interest to deal with wind, hydro, biomass, solar and ocean projects,” the Department of Energy earlier said.

RA 9513 aims to accelerate the development and use of the country’s vast renewable energy resources through fiscal and non-fiscal incentives for investors. Among these incentives are seven-year income tax holidays for RE developers, exemption from VAT and duty-free importation of equipment and machinery, reduction of corporate income tax after the expiry of the income tax holiday to 10 percent of net income as well as a zero percent VAT rate for the sale of power from RE.

It also assures investors in wind, solar, ocean, run-of-river hydropower and biomass in electricity generated from these clean sources through feed-in tariffs. Other incentives include duty-free importation of equipment, tax credit on domestic capital equipment and services, special realty tax rates, income tax holidays, net operating loss carry-over, accelerated depreciation and exemption from the universal charge and wheeling charges. The law also exempts the proceeds from the sale of carbon credits from all taxes.