Sy family to go into geothermal exploration

MANILA, Philippines - The family of retail tycoon Henry Sy plans to break into the geothermal power business in a bid to deliver a clean and sustainable source of energy in the country.

Informed sources said the SM Group is set to enter the power sector through a partnership with global energy giant Chevron, which is seeking a 25-year geothermal operating contract in the Philippines.

Chevron picked the SM Group as its partner for a proposed geothermal project in the Philippines to comply with the Constitution. Under the law, foreign ownership in firms seeking to exploit and develop geothermal power plants is limited 40 percent, with Filipino partners taking on 60 percent of the corporate vehicle.

The same sources pointed out that Chevron is APC Group Inc.’s partner in a geothermal power project in Kalinga.

The Sy-led Belle Corp. owns 47 percent of APC. Belle is a high-end leisure developer and gaming firm.

“Geothermal power is clean and renewable energy. It fits into their advocacy for the protection of the environment,” said the source when asked why the Sy group was venturing into geothermal exploration.

The SM Group, through flagship firm SM Investments Corp., is mainly engaged in five businesses – shopping mall development (SM Prime Holdings), retail of dry goods, apparels, food and other merchandise; real estate development (SM Development); hotels, and financial services (Banco De Oro Unibank and ChinaBank).

It also owns a 28.43-percent stake in Atlas Consolidated Mining & Development Corp.

The Department of Energy earlier said it was looking to raise geothermal energy production in the country by 2,000 megawatts by 2020. The country’s installed geothermal capacity presently stands at 1,966 megawatts, making it the second-largest geothermal producer in the world, next to the US with more than 3,000 MW, and dwarfing New Zealand, which has over 700 MW.

The country gets 17 percent of its electricity supply from geothermal power plants.

The government has taken steps to accelerate the development of its geothermal resources by tapping the help of the private sector. It has initiated major structural reforms through the privatization of National Power Corp.’s geothermal generating assets.