The Philippines is eyeing to borrow an estimated P16.71 billion for the rehabilitation of Agus-Pulangi power plants in Mindanao as it aims to hasten the country’s shift to clean energy resources.
The Department of Finance (DOF) bared on Tuesday it is now fine tuning a proposed arrangement with the Power Sector Assets and Liabilities Management Corporation (PSALM) and the National Power Corp. (NPC) on the funding and rollout and implementation of the rehabilitation projects for the decades-old facilities in the Agus-Pulangi Hydropower Plant Complex (APHPC).
Under the proposed memorandum of agreement, the DOF will be the main implementing agency, loan borrower and budget holder for the rehabilitation projects, while the PSALM and NPC, as owner and operator, respectively, of the APHPC will both serve as the implementing units.
Divided into two projects, the first series which is estimated to cost P10.19 billion will involve the rehabilitation of the Agus IV, V, VI, and VII plants that is expected to generate a total rated capacity of 417.1 megawatts while the second series which is pegged to cost P6.52 billion will rehabilitate Agus I, II, and the Pulangi IV plants expected to generate a total rated capacity of 515 MW, NPC Officer in Charge (OIC) Senior Vice President Melchor Ridulme said.
The estimated cost of the projects were based on a study done by the World Bank.
In his report to Finance Secretary Carlos G. Dominguez III, Ridulme said the rehabilitation of the APHPC plants, which is also aimed to ensure the reliability of power supply in Mindanao, is among the major projects of President Duterte that will be turning over to the next administration.
“Series of Project 1 is already pending approval by the Neda [National Economic and Development Authority], and the MOA [memorandum of agreement] for the proposed arrangement for the loan is being reviewed by the DOF,” Ridulme said during a recent DOF Executive Committee meeting.
As the government is in the process of improving the generating capacity of the Agus-Pulangi power plant complex composed of seven hydropower plants, Dominguez earlier said it can proceed with its plan to gradually acquire coal-fired power plants in Mindanao and repurpose them through the finance vehicle created for the Philippines under Asian Development Bank’s Energy Transition Mechanism (ETM) initiative.
The latter is meant to accelerate the transition from coal to clean energy of Southeast Asian countries like the Philippines.
The APHPC consists of seven mostly run-of-river hydropower plants with a total installed capacity of 1,001 megawatts (MW). Out of the 1,001 MW of installed capacity of the APHPC, only 600-700 MW is currently available, partly because of the limitations of its aging equipment.
Six of the seven hydropower plants are located along the Agus River which flows 36.5 kilometers (km) from Lanao Lake to Iligan Bay. The seventh hydropower plant is the Pulangi 4, located on the Pulangi River in Bukidnon.
As its Nationally Determined Contribution to the Paris Agreement, the Philippines has committed to a projected GHG emission reduction and avoidance of 75 percent from 2020 to 2030 for the sectors of agriculture, wastes, industry, transport, and energy despite being among the countries with the smallest carbon footprints.