SOLAR Philippines, the country’s largest solar provider, and Citicore Power, a unit of Citicore Holdings Investment Inc., inked a partnership to build the largest solar portfolio in Southeast Asia.
At the signing of a joint-venture agreement on Wednesday, officials from both firms announced their intention to build 250 megawatts (MW) by 2016. This will cost $600 million, and they will both equally invest in each project, and leverage their expertise in construction to compete the projects in time to avail themselves of the Department of Energy’s (DOE) feed-in tariff, an incentive for the first 500 MW in solar projects to connect to the national grid.
By end of the year, the total solar capacity in the country is expected to reach 500 MW, up from 50 MW in 2014 and 5 MW in 2013.
The partnership’s first project will be 60 MW in Calatagan, Batangas, where construction has already begun. Once operational, the $144-million solar-power facility will supply enough power to the entire Western Batangas, and become the largest solar farm in Luzon.
Targeting over three decades of operation, it is expected to offset over 1 million tons of carbon dioxide, equivalent to planting over 5 million trees.
Solar Philippines CEO Leandro L. Leviste said the remaining 190 MW will be put up in Luzon and Mindanao this year.
“There are two other sites that we are looking at. One in Luzon, which is going to be bigger, and another in Mindanao. These two, which will be ready for construction by third quarter this year, will complete the target 250 MW by 2016,” he said at a news conference.
Construction for all three projects will be completed by end of this year, Leviste added.
“This marks our first entry into power generation, and we are happy to do it with a company that shares our entrepreneurial spirit. We believe solar has massive potential for growth, and this is just the first of many investments we will make in clean, renewable energy [RE],” Megawaide CEO Michael Cosiquien said.
Citicore is a sister firm of Megawide.
“In a few years’ time, solar will become cheaper than fossil fuel, and one day supply the majority of the country’s energy needs. We are proud to partner with a company that shares our long-term perspective, and has made it a priority to turn this vision into a reality,” Leviste said.
Separately, Cosiquien said Citicore Power is gearing up to build 300 MW to 450 MW of RE within the year. The 250-MW solar-power capacity between Citicore and Solar Philippines is already part of this plan, he said.
“We are looking at a 60-MW hydropower project in northern Luzon, with an initial capex [capital expenditure] of $240 million,” he said, adding that financial closure for the said project is expected within the third quarter this year. Construction will start early
next year.
“We are also looking at a 12-MW biomass and we have identified a local partner for this, as well,” Cosiquien added.
Citicore Power will secure peso-denominated loans from local banks to partly finance its foray into the RE business. “We are looking at a debt-to-equity ratio of 70:30 but we are trying to achieve 80:20. However, this will highly depend on the reception of banks,” the official added.
Image credits: Nonoy Lacza
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