Gov’t, IFC look for investors in 25-MW power plant in Masbate
Thursday, February 23, 2006
By MYRNA M. VELASCOThe government, with the backing of the International Finance Corporation (IFC), will be scouting for investors, through a bidding, to pour in capital for the construction of a new power plant of 25-megawatt capacity that shall meet demand growth within the franchise area of the Masbate Electric Cooperative (Maselco) in the Bicol region.
A memorandum of agreement was recently signed between the electric cooperative, IFC, National Power Corporation and the Department of Energy (DoE) in improving power supply in the area which is already suffering from rotating power outages. It involves a comprehensive propping up of the power system in the area, including power generation, transmission and distribution.
The selection of a new power provider (NPP) for Masbate’s power needs will have to be supervised by the IFC, a unit of the World Bank group, as part of its role as transaction advisor for the privatization of the NPC’s Small Power Utilities Group.
For this commitment, IFC has to structure and firm up the agreements; and aid in pushing for a regulatory framework that would be able to attract private sector capital and expertise to power generation in remote islands.
IFC Philippines principal investment officer Jesse O. Ang noted that the Maselco venture already forms the second part of its commitment to corner private investors to meet power needs and expand electrification of NPC-SPUG areas.
The IFC last year successfully concluded a deal with the consortium of Coastal Power Development Corporation and Applied Research Technologies for the provision and improvement of power supply reliability in areas served by the Marinduque, Tablas and Romblon electric cooperatives.
The energy department initially opened 14 areas for privatization; and Ang admitted that their next target "would likely be more difficult" because these are in the conflictridden areas of Basilan, Romblon and Tawi-Tawi in Mindanao. "IFC will also handle the selection of their NPP," the IFC official said.
Meanwhile, Maselco general manager Elpidio Lim noted that the electric cooperative’s demand would likely go up starting next year, because of the anticipated operation of a big-ticket mining firm in the area.
The rest of the additional electricity requirement, he said, will be for residential customers which make up a significant chunk of the cooperative’s customer base; and for the needs of the cattle and fishing industry in Masbate.
NPC president Cyril C. del Callar, on the other hand, pointed out that if private capital can be secured to put up the muchneeded additional power capacity, funds allocated for SPUG areas can already be re-aligned for the upgrading of the transmission and distribution systems.
The participation of private sector investors in installing power generators in what used to be considered as "less viable areas" was structured through a concession-type contract between the winning bidder and local electric cooperatives that take the power on these islands.
The framework of this concession does not require the private supplier to buy existing generation assets of the state-owned power firm, thereby, allowing those assets to be deployed to other unserved areas in the Philippines. (MMV)
posted by philpower @ 10:53 AM,
