Meralco sets $800-M capital spending for 2 wind projects
Power utility giant Manila Electric Company (Meralco) is queuing capital spending of up to US$800 million for the two wind farm projects that it had cast as prospective investments in Luzon.
That will be for total capacity installation of 300 megawatts in two sites, one of which is 150MW that will be within its franchise area and the other 150MW capacity in Ilocos Norte.
“That will cost $800 million plus or minus. It will take maybe 24 months for these projects to be completed,” Meralco President Oscar S. Reyes said.
But he qualified that the project costs will have to be shared accordingly with their partners, as well as the loan component that they will have to raise for these ventures.
Power projects, including utility scale investments in the renewable energy sector, often thrive on a 70 percent debt to 30 percent equity ratio.
Reyes noted that they are currently in talks with prospective partners, but there was nothing signed yet as definitive tie-up deal.
“We have gotten indications which are attractively priced to us because they are significantly lower than the second round of FIT (feed-in-tariff),” he said. The second wave FIT rate for wind had been at R7.40 per kWh.
The Meralco executive qualified that their investment radar on these wind farm ventures are those that are “under development,” adding that “the existing developers are inviting us to provide power supply agreements and at the same time for us to see if we will be interested to co-invest with them.”
He similarly indicated the wind projects will be developed under the Spectrum subsidiary of Meralco, its RE investments arm.
“MGen (Meralco PowerGen) will be mainly on large-scale power plants, baseload coal. It is a matter of allowing them to focus on the big-ticket projects…we want MGen to focus on completing their portfolio rather than be sidetracked.”