Filipino energy business Aboitiz Power Corp (AP) is investing $850 million in new generating plant in Mindanao, Philippines.
With a combined capacity of 354MW, one plant will be a 300MW clean-coal facility while the other three will be 28MW, 14MW and 12MW run-of-river hydro plants.
Construction is expected to begin in the third quarter of the year and be completed by June 2015.
AP has been an independent power provider in Mindanao since the 1930s.
Its president and CEO Erramon Aboitiz told reporters at a briefing in Manila that the additional 354MW capacity will not be sufficient to address Mindanao's growing requirements, adding that one challenge is to lessen the island’s dependence on hydro power.
“There is an urgent need to implement a viable power strategy that will attract long-term investments in power, diversify the power sources and create a competitive supply market,” Aboitiz said.
Mindanao, which is reeling from power outages of up to six hours daily, needs 1,597MW. The existing plants can provide only 1,261MW.
The Agus and Pulangi hydropower plants, with a combined capacity of 982MW, are generating only 641MW due to poor maintenance of the facilities.
A Mindanao Congressman, Leslie Enica, told E&T that the island is faced with the grim prospect of longer outages with widespread disastrous consequences following the Federal government's failure to take steps to address the problem.
“This has not only discouraged potential investors but also resulted in a sharp drop in tourism,” Enica pointed out.
An official at the National Power Corp (NPC) in Manila, Eugene Cojunco, said investigations into the causes of the shortage will be looked into, but declined to be drawn into further comment.
A Manila-based analyst said there is no need for any investigation as the shortage has been a long-drawn problem that goes back to the early 1990s.
“The plan for more coal-fired plants should be reviewed as they add to the already bad pollution problem in the Philippines,” the analyst noted.
Mindanao, the eighth most populous island in the world has six regions with 26 provinces.
The island has long been a base for the separatist Moro Islamic Liberation Front, fuelled by religious differences and widespread poverty.
The MILF presence has discouraged foreign investors from participating in power projects in Mindanao.