SAN Miguel Corp. (SMC) bared plans over the weekend to put up a power plant, develop a port and invest in bulk-water facilities in five predominantly Muslim provinces.
The conglomerate said it signed a memorandum of understanding (MoU) with the Autonomous Region in Muslim Mindanao (ARMM) to help develop some of the country’s poorest provinces through investments in emploment-generating industries ranging from energy to ports and bulk water facilities.
The noncontiguous ARMM includes Basilan, Lanao del Sur, Maguindanao, Sulu and Tawi-Tawi.It is an Autonomous region in the Philippines and the only region that has its own government.
The MOU, signed by SMC President and COO Ramon S. Ang and Gov. Mujiv Hataman allows SMC to build power plants in yet to be identified areas of the region as part of the diversified conglomerate’s commitment to provide long-term solutions to Mindanao’s critical lack of reliable power.
Over the next two years, SMC committed to build power-generating plants that will serve the entire ARMM region, with estimated 573,446 households.
At present, only 30 percent of households in the region have electricity. Brownouts or short-duration power outages, particularly during the summer months, are prevalent.
“San Miguel has shown great vision by choosing to invest in ARMM. Over the next few years, we’re going to see what can be achieved when the private and the public sector work together with the best interests of the
local communities at heart,” Hataman said.
Ang said ARMM represents one of the most underpenetrated markets in the Philippines, “but is a region ripe
for investment offering huge potential growth.”
SMC’s investment in |ARMM is in line with its strategy to locate facilities and production centers outside urban centers, creating strong “second-tier cities,” generating jobs and rebalancing the national economy by income and growth dispersal.
Instability, lack of infras-tructure and lack of a stable power supply has made investors wary of the ARMM as investment destination. But Ang hoped SMC’s vote of confidence in the conflict-prone region would create much-needed jobs, entrepreneur opportunities, provide a major economic boost to the region and ease or deescalate perceived investment risks common among long-haul investors.
Last month Ang said some $4.2 billion would be set aside for five power plants in Luzon and Mindanao with a total capacity of 2,100 megawatts (MW).
Three of the new power plants will be within industrial estates in Mindanao that SMC plans to build. Each power plant is estimated to produce 300 MW.
The proposed industrial sites will each have it own power plant generating more or less 300 MW. Should there be a need for additional capacity, Ang said SMC vowed to build more.
He pegged the cost of the power project at $2 million per MW. Ang gave confirmation the project cost for all three Mindanao power plants could reach $1.8 billion.
“It is our intent to put up industrial estates in Mindanao to create more jobs. This will also attract local and foreign investors to relocate in those areas because power rates would be cheap,” Ang said.
He did not commit a target date of completion and start of commercial operations of the three power plants. Each of the estate, however, would take about three years to construct, according to Ang.
The other two power plants scheduled for construction would be in Luzon. These are the 600-MW coal-fired plant in Pagbilao, Quezon, under Central Luzon Premiere Power Corp. and another 600-MW coal-fired plant under Mariveles Power Generation Corp. in Bataan.
SMC has already signed a power-supply agreement with the Manila Electric Co. or Meralco who committed to buy the two Luzon plants’ output.