Bacavalley lines up $430-million renewable energy projects

MANILA, Philippines -  Bacavalley Energy Inc., a local firm that wants to be the largest renewable energy company in the country, will engage in several projects worth more than $430 million starting this year.

The company is already in talks with numerous foreign firms interested in geothermal, biomass and hydropower projects around the country.

“We are putting up a four-megawatt (MW) methane project in Navotas. Initially, it will be 2-MW in the 32-hectare landfill,” Bacavalley Energy president Peregrino Fernandez Jr. said.

Fernandez said the company, which has a foreign partner, is finalizing the agreement with the landfill builders.

Construction will start in September and the methane power project will be operational after a year.

Fernandez said it will invest $7 million for the initial two-MW or a total of $14 million for the entire four-MW project.

Bacavalley Energy is owned by businessman Salvador B. Zamora II who also holds a majority stake in Montalban Methane power project, the first methane power plant in the country.

In April 2009, Manila Electric Co. (Meralco) signed a contract for Montalban Methane Power Corp. to supply 8.19-MW to the power distributor. Fernandez said the new output will also be supplied to Meralco.

Meanwhile, Bacavalley Energy and another foreign partner will start the construction of the $62.5-million, 25-MW Lake Mainit hydropower plant in Jabonga, Agusan del Norte in the second half.

“It will be completed in two years but we can do it in 18 months. Financial closing will be in June,” Fernandez said.

The next project for Bacavalley Energy is the 40-MW, $120-million Bulanog run-of-the river hydropower project in Cagayan de Oro.

Fernandez said the company is conducting a feasibility study for the project, which was previously planned to be 130-MW dam and hydropower project.

Bacavalley Energy is also looking at greenfield geothermal projects in the country.

“One is 40 MW in Mindanao and the other is 20-MW in Luzon,” Fernandez said.

Another foreign firm is willing to invest for the geothermal projects, which cost around $4 million per MW, Fernandez said.

Exploration of geothermal projects will take a year and the actual construction is 18 months to two years.

Fernandez said its foreign partners are looking at booking profits by selling shares in an initial public offering that will be conducted moving forward.