DOF to borrow P16.7-B for Agus-Pulangi power plants’ rehab

Published June 28, 2022, 3:37 PM

by Lee C. Chipongian

The Department of Finance (DOF) is proposing to be both loan borrower and project owner for the P16.7 billion rehabilitation projects of the ageing Agus-Pulangi Hydropower Plant Complex (APHPC) in Mindanao.

The DOF said on Tuesday, June 28, that it is currently “finetuning” a planned arrangement with the Power Sector Assets and Liabilities Management Corporation (PSALM) and National Power Corp. (NPC) on the proposed funding and implementation of the rehab projects.

DOF Building in Manila

Based on the proposed memorandum of agreement (MOA), the DOF is the implementing agency, as well as loan borrower and budget holder, while implementing units PSALM is owner and NPC is operator.

In a report to outgoing DOF Secretary Carlos Dominguez III, NPC Officer-in-Charge (OIC) Senior Vice President Melchor Ridulme detailed the rehab projects as two series, or Series of Project 1 (SOP) and SOP 2.

Based on a World Bank study, the first series is estimated to cost P10.19 billion, while SOP 2 will need P6.52 billion.

The first series is the rehabilitation of the Agus IV, V, VI, and VII APHPC plants to generate a capacity of 417.1 megawatts (MW). The second series will rehabilitate Agus I, II, and the Pulangi IV plants for anoter 515 MW.

“Series of Project 1 is already pending approval by the NEDA (National Economic and Development Authority), and the MOA for the proposed arrangement for the loan is being reviewed by the DOF,” Ridulme told a recent DOF Executive Committee (Execom) meeting.

The DOF said that out of the 1,001 MW of installed capacity of the APHC, only 600-700 MW is currently available, partly because of the limitations of its decades-old equipment.

The APHPC rehab projects is one of the major projects of outgoing President Duterte that will be turned over to the next administration, Ridulme said. The projects will ensure the reliability of power supply in Mindanao but also to accelerate the country’s shift to clean energy sources, he added.

APHPC has seven mostly run-of-river hydropower plants with a total installed capacity of 1,001 MW.

Six of the seven hydropower plants are along the 36.5-kilometer Agus River, from Lanao Lake to Iligan Bay. The seventh hydropower plant is located on the Pulangi River in Bukidnon.