Tiwi, Mak-Ban Geothermal Assets
Monday, February 12, 2007
Absence of local partners stalling sale
By MYRNA M. VELASCO
The Constitutional mandate requiring foreign firms like Chevron Geothermal Philippines (formerly Unocal) to take a local partner for ventures engaged in the exploitation of indigenous energy reserves becomes a major factor delaying the plan to privatize the Tiwi and Makiling-Banahaw geothermal power facilities.
"We are still awaiting for their (Chevron) decision on Filipinization (taking a local partner for 60 percent equity)," Power Sector Assets and Liabilities Management Corporation vice president for asset management Froilan A. Tampinco has noted.
After concluding that step in the new corporate vehicle to take on the steam supply for Tiwi and MakBan plants, he said that Chevron would need to file geothermal resource sales contract (GRSC) with the Department of Energy.
"Until that is done, we cannot move along with Tiwi-MakBan’s privatization" Tampinco added.
The Electric Power Industry Reform Act (EPIRA) prescribes for a packaged privatization of the geothermal plants, which meant that an attached steam supply contract must go with the assets’ divestment.
The Tiwi and MakBan facilities have an aggregate capacity of 700 megawatts and feeding a significant fraction of Luzon grid’s power supply.
Prior to the disposal of the Tiwi-MakBan plants, state-owned National Power Corporation (NPC) pursued rehabilitation of some of the generating units.
NPC secured P3.5 billion funding from the Japan Bank for International Cooperation (JBIC) for the rehabilitation project; with cost simulation based on a "partial rehabilitation" of the assets.
Additional loan has been applied for by NPC in its bid for undertake full rehabilitation of the facilities; noting that when privatized, this will bring in better proceeds for the government.
However, during the string of super typhoons in September and November last year, the power plants sustained new round of damages that are now undergoing repair works.
The prescription for Chevron Geothermal to take in a local partner takes ground from the 1987 Philippine Constitution which limits the participation of foreign investors in the development and utilization of indigenous resources; and geothermal steam is included.
The concluded steam supply arrangement between Unocal and NPC years back, stretching until year 2021, puts mandate on the US firm to tap that local partner; and was held as among the major conditions for the facilities’ privatization. (MMV)
posted by philpower @ 11:15 AM,
