DMCI seeks partners for Calaca plant expansion

MANILA, Philippines - DMCI Power Corp., the power unit of DMCI Holdings Inc. of the Consunji Group, is eyeing to partner with the Ayalas, the Marubeni Group of Japan or Manila Electric Co. (Meralco) for the expansion of its 600-megawatt (MW) coal-fired plant in Calaca, Batangas, a ranking official said.

“We are in talks with them for possible partnership for the expansion,” said DMCI Power chairman Isidro Consunji, Jr.

DMCI Holdings is expanding the power plant in two phases with each phase capable of generating 300 MW. This would bring the total capacity of the Calaca plant to 1,200 MW.

The company would need roughly $500 million or P12 billion to fund the second phase of the expansion.

Of the amount, DMCI Power intends to raise 60 percent through debt and 40 percent from equity.

The company is already in talks with local banks for a loan that would fund the debt portion of its expansion requirements.

Consunji said there is room for expansion because of growing demand. The local community in Batangas also favors the use of coal.

The Consunji’s Southwest Luzon Power Generation Corp., the wholly-owned subsidiary of Semirara Mining Corp., last year signed an P11.5-billion loan agreement with three local banks to finance the first phase (300-MW) of the expansion.

The banks are Henry Sy-owned Banco de Oro Unibank Inc., Bank of the Philippine Islands of the Ayala Group and China Banking Corp., also owned by the Sy Group. BDO Capital and Investments Corp. acted as lead arranger.

Consunji said the company hopes to finalize a partnership deal with any of the three groups -- Ayala, Meralco and Marubeni – for the second phase of the expansion within the year.

 â€œWe are looking at this year,” he said.

DMCI Power is also on track to deliver the supply requirements of Palawan Electric Co. (Paleco), Consunji said.

After delivering an initial five megawatts in December last year, DMCI Power will deliver 10 MW in March and 12 MW in September.

By September 2014, DMCI Power will deliver 15 MW of coal as it is now pursuing the construction of a 15-MW coal plant for Paleco. This is set to be completed next year, Consunji also said.

DMCI Power offered the lowest bid with true cost generation rate of P9.38 per kWh but it revised its rate to P12 per kWh because it pegged the lower rate to its proposed coal project instead of diesel-fired power generators.