ADB approved $120-million for power plant in the Visayas
Posted on December 25th, 2009
The Kepco SPC Power Corp. (KSPC), a joint venture between Korea Electric Power Corp. and SPC Power Corp, acquired a loan from the Asian Development Bank (ADB) for the construction of a major power plant in the Visayas.
The ADB has approved the grant of $120-million 12-year term loan for the construction of a 200-megawatt (MW) coal-fired power plant in Naga City, Cebu.
The proposed 200-MW power plant will be using circulating fluidized bed combustion boilers, considered to be the best technology for plants this size. The grant is in line with ADB’s energy policy of helping Asia secure adequate power supply while promoting cleaner power generation.
The project will have the first 100-MW to come on line in February 2011, while the next 100-MW unit will come May 2010. KSPC will sell power from the plant primarily to electricity cooperatives on Cebu and Negros islands, and to the proposed wholesale electricity spot market in the Visayas.
ADB acknowledges that many parts of the Visayas region are economically promising but poor. There is little investment in power generation, which has led demand to outstrip supply. This threatens to hold back further development in the region. There are intermittent blackouts on the islands of Cebu, Panay, and Negros, which are set to become more frequent until more power is made available.
Joe Yamagata, deputy director general in ADB’s Private Sector Operations Department, said
“A steady supply of power will help develop the local economy, creating jobs in manufacturing, tourism and other sectors that will boost incomes for local families in the region. At the same time, a reliable power supply will allow hospitals, schools, and other public services to fully function.”
Yamagata added that the project would help promote a competitive market for electricity and provide a model for future private-sector investment in power generation, including renewable energy.
A coal-based power plant is the most practical option in Cebu, because further use of geothermal resources, which is already providing 70 percent of power in the Visayas, cannot provide enough immediate, reliable and low-cost power.
