Malaysian group inks deal for $160-M RE project in Cebu

MANILA, Philippines - The Mudajaya Group of Malaysia has signed a partnership agreement with local players for a $160-million integrated renewable energy project in the Philippines.

“We are proposing to put up at least 200 MW of generating capacity...We hope to start with 50 MW and the indicative investment is $160 million,” said Anto Joseph, group managing director and CEO of Mudajaya Group Bhd.

Mudajaya Group, which owns 40 percent of Amihan wind project, yesterday signed a shareholders agreement with Filipino firms Amihan Energy Corp. (30 percent) and Visayan Wind Energy Holdings Corp. (30 percent).

“Our intention is to make this as one of the largest integrated wind farms in the Southeast Asian region,” Joseph said.

Visayan Wind chairman Esteban Peña Sy said this will be the first wind power generation project in Cebu.

Amihan wind energy project will put up wind mills in an 18,000-hectare leased lot within Cebu City, Balamban and Toledo City in Cebu.

The technical design for the wind project is being finalized to ensure long-term safety especially given the recent earthquake that hit Cebu.

Joseph said construction should begin in the next six to nine months, with partial commissioning of the wind farm likely to start late next year.

The parties are now in talks with various local and foreign banks for the funding of the wind project.

Depending on the energy demand in the next five to seven years, the partners might put up biomass and solar power projects in the vicinity to increase output to as much as 400 MW.

Amihan wind energy project aims to take advantage of the feed-in tariff (FIT) scheme, Joseph said.

The FIT scheme guarantees investments of renewable energy firms through fixed rates that would be shouldered by consumers over 20 years. Financial viability of renewable power projects are crucial for energy firms to secure bank financing.

Peña Sy said more power output is needed to support the fast-paced economic growth of the Philippines.

To date, the Philippines sources 35 percent its total power requirements from renewable energy sources.

Mudajaya Group is one of Forbes Asia’s 200 Best Under a Billion companies. It has $541 million in sales, $78 million in net income and $463 million market capitalization.