Philippines: MRC Allied to venture into energy

Philippines: MRC Allied to venture into energy

Listed property developer MRC Allied Incorporated is venturing into the
energy business, targeting to develop at least 1,000 megawatts (MW) of power
generating capacity in the next 5 years.

To achieve the target, the company, which is 51.9% owned by Menlo Capital
Corporation, is determined to put up at least 200 MW of capacity every year
until 2020.

All in all, the cost to achieve the 1,000-MW target is estimated to reach
anywhere from P80 billion to P100 billion, said MRC Allied's newly appointed
president Gladys Nalda.

"We are currently pursuing a new thrust. We plan to develop at least 1,000
megawatts of clean and renewable energy by 2022," said Nalda, former vice
president for legal and corporate affairs of state-owned PNOC Renewables
Corporation and legal counsel of the Department of Energy.

Half of the planned 1,000 MW would be renewable energy, while the other half
would be a mix of various renewable energy technologies and could include
liquefied natural gas, said Nalda.

Not all power projects would be built from scratch as MRC Allied is open to
acquiring or partnering with existing renewable energy developers,
particularly those power projects that failed to secure incentives from the
government via the Feed-in-Tariff (FIT) scheme.

"There's an opportunity for us to acquire existing renewable energy plants,
specifically those that are already connected to the grid [which] will
provide us with immediate returns," she said.

The company will raise funds to finance these capital-intensive power
projects. (READ: Renewable energy is healthy energy)

"To achieve this goal, we will endeavor to raise funds either on our own or
with strategic partners. We will aggressively explore all available options
to raise capital and finance our RE projects," Nalda said. She, however,
refused to divulge identities of prospective investors.

For 2017, MRC Allied has an aggregate of 160-MW solar capacity in the
pipeline.

These are the 60-MW solar plant in Naga City, Cebu and the 100-MW solar
power project inside the Clark Green City in Tarlac. Both are still in the
pre-development stage.

Menlo Renewable Energy Corporation, a 100% subsidiary of MRC Allied, will
handle these solar projects.

Menlo Renewable's solar power project in Cebu will cost P3 billion.

For the solar project in Tarlac, Menlo Renewable has partnered with the
Bases Conversion and Development Authority (BCDA) and Sunray Power
Incorporated. The project cost is estimated at P5 billion.

Project commissioning for the two solar power projects is expected to happen
two years from now.

Once operational, Nalda said these two projects could initially contribute
at least P619 million in revenue.

For this year, the company plans to issue preferred shares worth P1 billion
for its funding requirements, in addition to an earlier plan to conduct
private placement also worth P1 billion.

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Link to Original Article:
https://www.rappler.com/business/173309-mrc-allied-venture-into-energy

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com