Meralco Eyes Power Plant Project in Vietnam

‘Significant minority interest’ in foreign venture

By Amy R. Remo
5:37 am | Wednesday, October 31st, 2012

MANILA, Philippines—Manila Electric Co., the country’s biggest power distributor, is planning to go into the power-generation business in Vietnam as part of its long-term plans to expand its operations abroad.

Although only preliminary talks were underway, chairman Manuel V. Pangilinan told reporters on Monday that they have yet to firm up their assessment of the potential Vietnam market.

“I think we’d take modest steps in Vietnam. Of course the numbers [have] to work for us, so as of the moment, we have no clue as to what numbers will work. But the arrangements seem to be quite reasonable because the power will be bought by the government through EVN (VietNam Electricity),” Pangilinan explained.

He added that initially, Meralco was looking at projects that would range anywhere from a minimum of 150 megawatts (MW) to 600 MW. Preferably, the distribution utility would want to have a “significant minority interest” in the partnerships that may be formed with prospective Vietnamese partners.

“Why minority? We don’t have first-hand experience of how business operates in Vietnam, especially in the regulatory aspect. So it’s better to take certain baby steps first,” Pangilinan said.

Meralco president and CEO Oscar S. Reyes had said that Meralco was looking at potential projects even outside the Philippines to enhance the company’s profitability and showcase the technical competency of its engineers, technical and customer service people.

Locally, Meralco, through its power-generation arm Meralco PowerGen, is building a 2,700-MW portfolio that would consist of 1,200 MW of coal-fired facilities and 1,500 liquefied natural gas-fed power plants.

The first 600-MW coal facility is being put up at the Subic Bay Freeport in partnership with Aboitiz Power Corp. and Taiwan Cogeneration, through a vehicle company called Redondo Peninsula Energy (RP Energy).

The $1.28-billion Subic facility is Meralco’s initial venture in its re-entry to the power-generation business. Development activities are continuing as the company hopes to operate the first 300 MW plant by the first half of 2016.

As for its LNG plans, Meralco earlier said that it was considering two locations—Quezon and Batangas.

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