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| Achong Tanjong | A MEMORANDUM of Understanding (MoU) between Brunei Darussalam’s Dimension Strata Sdn Bhd and Bangladesh’s Green Power Ltd was held at the Bangladeshi High Commission in Brunei Darussalam in Jalan Sungai Akar, for joint collaboration in exploring investment and business opportunities yesterday. The ceremony was witnessed by the Bangladesh High Commissioner to…
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MANILA, Philippines — MRC Allied Inc. is pursuing a solar rooftop project in Mindanao to meet its 100-MW target and become a key player in the country’s solar industry.
In a disclosure to the Philippine Stock Exchange yesterday, MRC said it executed a memorandum of agreement for the development and installation of a 1.1-megawatt solar photovoltaic (PV) rooftop system for a mall located in the Mindanao area.
“Under the MOA, MRC will be the project developer and owner of the solar facility, while a private entity, owning and operating the mall, will be the power off-taker,” the disclosure read.
The company will be pouring in P67.4 million to finance the project.
The cooperation between the two parties shall be for 20 years from the issuance of the acceptance certificate.
Meanwhile, the MOA will take effect once the power off-taker issues the acceptance certificate to MRC after successful completion of actual performance testing and interconnection.
MRC president and chief executive officer Augusto Cosio Jr. said the company is targeting around 100 MW of solar power projects within the next two years.
The company inked a MOA with local firm Edward Marcs Philippines Inc. (EMPI) to power up two rice milling plants in north Luzon using solar power.
Under the deal, EMPI will supply, deliver, construct and test a 550-kilowatt-peak (kwp) grid-tied solar PV rooftop project for two rice milling plants located in the Northern Luzon.
It is part of the solar PV project pipeline of at least four MW, which MRC hopes to complete in the next two years.
MRC is also eyeing to raise its stake in the 50-MW Sulu Electric Power and Light Philippines Inc. (Sepalco) solar project, in which it currently has a 15 percent stake.
Cosio said the company is in talks with other stakeholders and plans to increase its shareholdings to gain an additional 45 percent, or at least majority control of the company.
If successful, MRC will have an attributable capacity of at least 30 MW from the Sepalco project.
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KKR & Co. is buying a stake of as much as S$45 million ($33 million) in Barghest Building Performance, a Singapore provider of energy saving solutions, in the private equity firm’s first impact investment globally.
It’s investing as part of a Series B fundraising for BBP, which helps companies throughout Asia reduce electricity consumption by digitizing air-conditioning systems. The company plans to use the funds to grow its business in the region, invest in new technology and hire more staff, according to BBP Chief Executive Officer Poyan Rajamand.
“Customers come to us because our solution allows them to save energy today,” Rajamand said in an interview Thursday with Bloomberg Television. “With advanced analytics that we have at the back end, we can help them save more and more, year after year.”
Global private private equity firms including KKR, TPG and Bain Capital LP have been pushing into impact investing, the idea of seeking both financial return and social benefit. KKR is currently raising funds for investments with this purpose as well as several other strategies, it said on its October earnings call.
TPG plans to start seeking $3 billion for its second social impact fund this year, while Bain Capital raised $390 million in 2017 for a fund that focuses on mission-oriented North American companies. Ashish Shastry, KKR’s Southeast Asia head, declined to comment on any impact fundraising by the firm.
BBP, which counts chipmaker Micron Technology Inc. and hotelier Shangri-La Asia Ltd. as clients, can help cut a building’s energy consumption by as much as 40 percent, Rajamand said. The six-year-old company uses sensors, software algorithms, equipment controls and engineering design to try to cut electricity consumption in air-conditioning systems in commercial and industrial buildings.
It plans to expand to the Philippines and possibly South Korea and Japan, Rajamand told Bloomberg earlier this week. The company’s existing markets include China, India and Taiwan. BBP could grow its headcount by about half, to 60 people, by the end of next year, he said.
The BBP deal adds to almost $900 million of investments KKR has announced in Southeast Asia this year, more than double last year’s volume, according to data compiled by Bloomberg. KKR agreed this month to invest as much as S$500 million in V3 Group Ltd., the Singapore-based luxury retailer that owns brands including Osim massage chairs and TWG Tea.
It has also pumped S$200 million into PropertyGuru Pte, the region’s biggest real estate portal, and took a stake in Philippine technology firm Voyager Innovations Inc.
“We hope that this momentum of investing will be the new normal for KKR in Southeast Asia,” KKR’s Shastry said. “We’re at the beginning of a very interesting time for innovation” in the region.
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It wants to accelerate the construction of transformer stations and start operations of a line in South Saigon.
Vietnam Electricity (EVN) will accelerate its projects in 2019 to meet rising demand and ensure sufficient supply for the year, Vietnam Energy reports.
The projects include 220kV transformer stations in Luu Xa, Quynh Luu and Quang Chau and the Binh Long – Tay Ninh 220kV line. EVN will also hand over the site for the construction of a 500kV line.
It also eyes switching on the operations of the South Saigon – Precinct 8 220kV line in December 2018.
EVN is also turning its affiliate Electricity Generation Corporation 3 (EVNGENCO3) into a shareholding company. It eyes doing the same with EVNGENCO2 and EVNGENCO1 following the prime minister’s guidelines.
The report added that ensuring electricity supply at reasonable prices has been a headache for authorities due to rising demand and increased demands from foreign investors that operate their factories in Vietnam.
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Singapore — State-owned Petronas aims to start commercial LNG bunkering operations at several facilities across Malaysia by mid-2019, in a move that reaffirms the company’s efforts to compete in a key growing segment and support Malaysia’s strategic intent of becoming a regional LNG bunkering hub.
Following the company’s first LNG bunkering operation at the Pengerang LNG terminal earlier this year, Petronas aims to start up commercial LNG bunkering by second half of 2019 from Melaka and Terengganu in peninsular Malaysia, and Labuan in Sabah.
“Dual-fueled LNG-based engines are expected to be the future solution,” the company said in its annual activity outlook released Wednesday. “In close collaboration with industry associations, programs are aligned to develop necessary infrastructures to support a swift and effective migration to LNG, as the cleaner option.”
The company’s first LNG bunkering was delivered aboard the Kairos, the world’s largest LNG bunker vessel with a capacity of 7,500 cu m, as the carrier made its way from the Hyundai Mipo Dockyard in Ulsan, South Korea, to Europe, the company said in a statement last month.
Pengerang LNG’s bunkering, reload and small-scale capabilities position the facility, strategically located in the Singapore Strait, as a front runner to meet the changing landscape of the marine fuel market.
“We believe that small-scale LNG opportunities will increase from the utilization of alternative cleaner fuel such as LNG. The new regulation of 0.5% global sulfur cap to be imposed by the International Maritime Organization in January 2020 will make LNG the alternative fuel of choice for the shipping industry,” Petronas LNG chief executive officer Ezhar Yazid Jaafar said in November.
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THE local unit of Australia-listed Energy World Corp. Ltd. (EWC) has revived talks with lenders to finance the completion of its 650 megawatt (MW) combined cycle gas-fired power plant after it has received certification from the government that the project is one of national significance.
“We are in the process of finalizing the project funding from the Development Bank of the Philippines (DBP) and Land Bank [of the Philippines] and other institutions, and hopefully we’re about six to eight months away from commercial operation of the first 200-megawatt gas turbine,” said EWC Director Graham S. Elliott in an interview.
The funding will be used for the completion of the power station, he added.
“It’s a re-working of the loan agreement that was signed about three years ago — an updated version of the existing loan agreement,” he said.
Mr. Elliott declined to disclose the amount being borrowed from the lenders, but said the project needs additional funding.
“It’s something around $75 million [that] we’re looking for,” he said.
Aside from the power plant being built in Pagbilao, Quezon province, EWC previously disclosed plans to build a liquefied natural gas (LNG) hub in an adjacent area with a capacity of 3 million tons per annum.
The LNG capacity can support gas-fired power plants with a combined capacity of 3,000 MW. It can provide expansion options for both the company and third-party gas customers.
Mr. Elliott said the hub is a strategically important asset for the country’s nascent gas industry. The facility is now 92% completed, he said.
“The delay in the project has been because in order to make the LNG hub terminal commercial we had to have the power station operational. In order to have the power station operational, we had to connect to the transmission lines,” he said.
“The delay came about because the funding banks insisted that we finalize the right of way to make sure that we could connect the power station to the transmission lines. That’s now being done and that’s why we now have the confidence that we’ll be up and running in the near future.”
Ahead of the completion of the LNG facility, EWC plans to source the fuel for its power plant initially from the spot market.
Mr. Elliott said EWC is developing its own LNG production in Indonesia where it has production-sharing contracts with the Indonesian government.
“But we’re also developing projects in the USA so that we can avail ourselves of some of the world’s most economically priced gas and as a long-term solution, we will be looking to bring that gas to the Philippines,” he said.
Despite the delay, there had been no changes in the components or capacity of the project.
“It’s going to be initially the first tank is 1,300 cubic meters of LNG. The second tank will be another 1,300 cubic meters of LNG. The first power station is two units of 200 MW each gas turbines and they will be linked with a 250-MW steam turbine when it’s in combined cycle phase so that would be 650 MW. And in the future we would like to add further expansion of the power generation at the site,” Mr. Elliott said. “We’d like to just keep repeating units up to possibly 3,000 MW.”
Sought for comment, Francis Nicolas M. Chua, DBP first vice-president and head of the bank’s corporate finance group, confirmed the revival of talks with EWC.
“We’re the arranger for the financing for them. We have actually gotten approval previously on the project. Unfortunately that did not pan out due to other circumstances. So we’re looking at it again and hopefully this time we’ll see it through,” he said.
Mr. Chua said DBP is syndicating the financing with several banks, but declined to disclose the loan amount.
He said the certification from the Department of Energy (DoE) that the Pagbilao power plant is an energy project of national significance would help, but the loan application would be evaluated based on the company’s capacity to complete the construction, ability to pay back, and the necessary regulatory approvals.
Patrick T. Aquino, director of the DoE’s Energy Policy and Planning Bureau, confirmed that EWC had been granted the certification but only for the power plant component.
“EWC has an integrated LNG-plus-power plant. The one that was awarded a certificate of EPNS (energy project of national significance) was for the power plant component,” he said.
Mr. Elliott said the certification would bring “tremendous benefit for us.”
“It helps all of the ancillary players such as NGCP (National Grid Corporation of the Philippines) to achieve their permitting, for instance, with the construction of the new substation. So it will help those players that are ancillary to the project make sure that they meet their deadlines as well,” he said.
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THE Energy Development Corp. (EDC) has signed a two-year agreement to supply Citizen Machinery Philippines, Inc. with geothermal energy for the latter’s facilities in Tanauan City, Batangas province.
Under the deal, which shall commence on December 26, EDC shall provide Citizen Machinery Philippines with 2.5 megawatts (MW) of electricity from the company’s BacMan geothermal project.
EDC, through its unit Bac-Man Geothermal, Inc. (BGI), owns and operates 150-MW geothermal power plant in Bacon, Sorsogon City and Manito, Albay province.
“As a manufacturing company, Citizen Machinery Philippines desires to be supplied by stable and low-cost electricity, especially since our foundry consumes much power,” Citizen Machinery Philippines President Akihide Kanaya said in a statement.
“EDC’s BacMan geothermal project meets these criteria. At the same time, we remain committed to give our customers the highest level of satisfaction as possible,” he added.
“This includes making sustainable contributions to society through innovative manufacturing solutions, while recognizing our impact to the environment. Choosing to be powered by 100-percent renewable energy strongly supports this commitment.”
The agreement comes a month after EDC signed a deal with Continental Temic Electronics Philippines to supply 2.7 MW of geothermal power, also sourced from the BacMan project.
Formerly Miyano Philippines, Inc., Citizen Machinery Philippines manufactures and assembles automatic lathe machines, which produces other machines for use in different industries. It is a subsidiary of Citizen Holding Co. Ltd.
EDC is into exploring, developing, operating, and using geothermal energy and other indigenous renewable energy sources to generate electricity. It has an installed capacity of 1,471.8 MW.
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PETALING JAYA: (TNB) shares slipped 0.1% to RM13.54 despite entering into a partnership to grow its renewable energy (RE) portfolio.
Tenaga Nasional (TNB) had entered into an agreement to subscribe to a compulsorily convertible debenture (CCD) issued by India’s GMR Bajoli Holi Hydropower Pte Ltd (GBHH) for 2.26 billion Indian rupees (RM133.2mil).
The proposed investment of 2.26 billion rupees will be funded via a combination of internally generated funds and borrowings.
The CCD has a tenure of 30 years and will be converted into a 30% equity stake before the end of tenure.
This is to facilitate GBHH’s construction of a 180MW run-of-river hydroelectric power plant within the Himalaya range in the state of Himachal Pradesh, India.
Overall progress of the project stands at 78% and the plant is expected to commence its commercial operations by October 2019.
The agreement was inked with GBHH, GMR Energy Ltd and GMR Infrastructure Ltd.
According to PublicInvest Research, the 30% equity acquisition will not have a significant impact on TNB’s earnings in the near term.
Hence, the research house is maintaining its forecasts and estimates on TNB.
“We understand that the hydroelectric power plant project offers attractive and stable returns with a 17-year power purchase agreement with a reputable AA-rated offtaker.
“This acquisition will fit into TNB’s expansion plan to increase its RE portfolio.
“Once fully operational, the proposed investment will raise TNB’s total international RE portfolio to an estimated 370MW,” said PublicInvest Research.
Meanwhile, Nomura Research expects TNB’s profit after tax and minority interest to increase by 11% and 6% in financial years 2019 and 2020 (FY19 and FY20), respectively.
This is will be mainly driven by a steady rise in power demand and absence of impairments reported in the first nine months of 2018.
“As generation project capex cycle ends, we estimate free cash flow yield will rise to 7.3% in FY20, in line with Asean utility peers.
“Malaysia’s power demand was weak from the second quarter of FY17 to the end of FY17, averaging just 0.2% year-on-year during the period.
“However, we have seen a decent recovery in power demand over the past three quarters, with average power demand growing by about 2.7% year-on-year compared to regulatory period two power demand growth assumption of 1.8% to 2% during FY18 to FY20.
“Most of the revival in power demand is attributable to the industrial sector in the past two quarters,” said Nomura Research.
ASEAN Centre for Energy (ACE) is an intergovernmental organisation within ASEAN structure that represents the 10 ASEAN Member States’ (AMS) interests in the energy sector.
