By Bernie Cahiles-Magkilat
Filipino-owned Ormin Power Corp. said the second 10-MW phase of the 30-mw hydro power project in Mindoro will cost P1.8 billion only, significantly lower than the P2.4-billion first phase.
Jolly L. Ting
The company has just inaugurated the first phase of the Inabasan Hydropower Project in Mindoro.
According to Ormin Power Vice President Jose Ocampo Ilagan explained that the cost of the second phase would be dramatically lower than the first phase as it would be utilizing the same water diversion weir that has been created for the 1st phase. The next phase will also share in the infrastructure of the first as well as common facilities, pipe laying, and access roads.
“The common facilities and various access already created for phase 1 provides for a certain degree of economies of scale for the succeeding phase, and is expected to bring down by 30% the per MW cost of constructing for the new phase,” said Ilagan.
Ilagan said the company intends to pursue the same 60-40 debt equity project finance arrangement as the first phase.
“Shareholders had signified that they are ready to take on the equity requirements of the next phase. But the reality for renewable energy projects is its high capex nature which may put pressure on the ability of its shareholders to extend the required resources especially in the immediate term,” Ocampo said.
The success though of the first phase, which was just inaugurated recently, plus the increasing novelty of renewable energy, has raised the interest of various investors, local and foreign alike.
Ormin has been approached by several investors from the US, Japan and China, with varying interest on modes of participation, he said.
“Ormin Power is open to pursue beneficial arrangement with parties interested to partake in the success of the Inabasan Hydropower Project,” he said.
The first phase was a long-term debt financing provided primarily by the Development Bank of the Philippines and other commercial banks like Metrobank, RCBC and Philippine Business Bank, for the short-term financing needs.
The 40 percent equity is controlled by subsidiaries created under the listed Jolliville Holdings Corporation (JOH), alongside minority partners.
The completion of the 10-megawatt Inabasan Hydro-Electric Power Plant (IHPP) is in response to the government’s, particularly the Department of Energy, call to “develop the country’s hydro-power resources essential to meeting energy demand over the next 10 years.”
The IHPP is owned and operated by Ormin Power, Inc. (OPI), an independent power provider (IPP) and the power-generation subsidiary of Jolliville Holdings Corporation, chaired by Jolly L. Ting.
“The completion of the Inabasan Hydro-electric power plant is a realization of the vision of harnessing renewable energy to provide clean, sustainable and affordable energy to Oriental Mindoro to support the growth and development of the province,” Ting explained.
Supposed to be completed in 2016 two years after it started in 2014, the power project suffered a three-year delay because of four big typhoons, Nona, Nina, Urduja and Usman, that battered the island in those years.
The project undertook rehabilitation and major repair works because of the damage wrought by the typhoons.