Kepco eyeing partnership deal with local power firm

CEBU, Philippines - The announcement of Filipino-owned power generation firm Asia Pacific Energy Resources Venture Inc., (APERVI), to build a 150-megawatt coal-fired power plant to address the looming power shortage in the Visayas grid, has generated partnership offers from interested foreign investors.

APERVI, owned by a consortium of Filipino businessmen, recently disclosed to start the P14 billion power plant project located in Cadiz City in Negros Occidental that is targeted to be operational by 2016.The plant will be operated by its subsidiary firm called North Negros Energy Power Corporation.

“We have received a lot of inquiries, and already met with several interested investors from different countries like Canada, Italy, Europe and China. But the most active that showed interest so far is the Korean power firm Kepco,” said APERVI president Cesar I. Loa-as.

Loa-as said the company has been considering to open its doors for partnership as the company is looking for good equipment provider, as this is expected to cover large part of the capital expenditure (capex).

He added that APERVI already got a letter of intent from Korea Electric Power Corporation (Kepco) and that has already been signed by the APERVI board of directors.

Also, both companies already signed a non-disclosure agreement as part of the requirement of Kepco’s feasibility study, he added.

“They (Kepco) visited the site three times already,” said Loa-as adding that despite this strong intent for partnership, APERVI is still not closing its doors to consider other interested investors.

About 70 percent of the total project cost of the power plant (P14 billion) will be spent on the equipment. “We need a good equipment provider, that’s why we decided to open the company for partnership.”

Kepco is the largest electricity utility in South Korea. It has opened its power plant in Cebu few years back, supplying the Visayas Grid. About 80 percent of the power supply in Northern Negros is currently supplied by Kepco-Cebu.

If a partnership will be clinched Loa-as said the investor will pour in a fresh capital equity of 30 percent of the total project cost, which is estimated at P404 million.

At present, APERVI has short-listed about 14 companies which showed intent to invest with North Negros Energy Power Corporation.

The plant is expected to be operational by 2016, while ground works is scheduled to start by the second half of 2014.

The plant however, is expandable to supply as much as 300 megawatt, Loa-as said.

According to Loa-as, the company has seen the potential of venturing into power plant facility, noting the shortage of power supply within the Visayas grid, which include Cebu.

He said while Cebu has a number of newly established power plants to supply the growing demand, Negros Occidental on the other hand, has continued to import power from Cebu plants.

Establishing, a coal-fired plant in Negros, will not only benefit the electric consumers in the region, allowing them to avail of much cheaper kilowatt-per-hour electricity rate, it will also help address the looming power shortage in the Visayas.

At present, Negros Occidental is importing 80 percent of its power requirement from different power plants in Cebu. While the whole Visayas grid is short of 300 mega-watt supply.

The entire grid’s current demand for power is at P1,900 megawatt, while power plants supply within the grid can only produce 1,700 MW.

Aside from frequent brownouts, Negros Occidental electric consumers are paying higher electric rate compared to Cebu, which is P8 per kilowatt hour.

For this reason, APERVI has ventured into the power plant facility, to help arrest the power scarcity and shortage problem in the Visayas grid.

The North Negros Energy Power Corporation, will be the first coal-fired power plant in the province (so far), Loa-as said.

Coal-fired power plant produces electricity by burning coal in a boiler to heat water to produce steam. The steam at tremendous pressure, flows into a turbine, which spins a generator to produce electricity.  The steam is cooled, condensed back into the water, and returned back to the boiler to start the process over.

APERVI, has been in the coal importation, and distribution business since February 2011, with the intent of contributing to the development of the Philippines’ energy and mining industries. /JOB (FREEMAN)