Meralco PowerGen Corporation (MGen) is expected to recover and profit next year if its first power generation plant will be in full operation. This will reverse the losses it incurred for the past due to the delays by some of its projects. MGen, if taken as a whole, will become profitable for 2020. When asked to quantify the profit expectation of the firm, it disclosed that the budget will still undergo board review so that the management will finalize and present it by November 25. It looks like the energy generation arm of Meralco will own a good position in the market next year.
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San Buenaventura Power Ltd. Co. (SBPL) was formally launched on October 15, 2019, this year. This is the first supercritical coal-fired plant in the country costing P56.2 billion and it’s giving additional supply to the Luzon grid. The firm describes SBPL as the most advanced coal plant using a high efficiency, low emissions coal technology that permits operation at high temperatures and pressures. This plant targets to reach higher efficiencies while reducing emissions. With the successful inauguration of SBPL, MGen will surely recover from its past performances.
Meralco was able to secure provisional authority from the Energy Regulatory Commission (ERC) in September to be able to operate the 500-megawatt (MW) plant. After it had secured the approval, it started to operate commercially last September 26. Currently, this powers up some parts of Luzon and this accounts for 72% of the gross domestic product of the country. The firm also noted that there will be a slight impact on the fourth quarter performance since the commercial operation started at the end of September so the last quarter profit is still possible to ramp up.
The cost of the plant was funded partly by a P42.15-billion project finance facility. This is believed to be the biggest all-peso transaction in the Philippines as of now. The finance facility was put together by a consortium of local banks. The power plant was constructed by a consortium of Daelim Industrial Co. Ltd. of South Korea and Mitsubishi Corp. of Japan. This partnership was described as experienced engineering, procurement, and construction contractors with very strong track records. In fact, SBPL was owned by MGen (51%) and New Growth BV who has the rest of the stake.