Semirara Mining and Power Corp., Meralco Powergen Corp. and St. Raphael Power Generation Corp. terminated their joint venture agreement to construct a 700-megawatt coal-fired power plant in Calaca, Batangas.
SMPC said in a disclosure to the stock exchange on Tuesday the three parties agreed to terminate the joint venture agreement dated April 27, 2016 over the construction, ownership and operation of a 700-MW coal power plant effective Nov. 9, 2020.
“SMPC shall reacquire all the equity shareholdings of MGen in SRPGC. SRPGC was originally a wholly-owned subsidiary of SMPC and by virtue of the JVA, the parties, SMPC and MGen have 50:50 equity ownership over SRPGC,” SMPC said.
SMPC is owned by the Consunji Group while Meralco PowerGen is the power generation arm of power retailer Manila Electric Co.
SMPC officials were unavailable for comment as of press time.
Officials said the withdrawal of the companies from the planned joint venture was due to their separate participation in Meralco's competitive selection process for power supply. CSP rules prohibit involvement in multiple bids, and MGen plans to participate through A1E while Semirara's SRGPC will submit is own bid.
Meralco earlier signed a power supply agreement with SRPGC for the supply of up to 400 MW of capacity. The Supreme Court, however, ruled that energy companies should undergo a competitive selection process for the PSA, thereby nullifying the agreement.
The SRPGC coal project is one of the indicative power projects identified by the Department of Energy to support rising demand.
Data from the Energy Department showed that the project was supposed to start commercial operations by 2025, with the financial close dependent on the CSP of Meralco in the last quarter.
Meralco PowerGen president Rogelio Singson said the decision to terminate the agreement was also made in the wake of the moratorium for new greenfield coal power plants.
“That is [moratorium] also included, due to our plan to transition to RE [renewable energy] resources,” Singson said.
The project’s commercial operation would be anchored on the completion of the National Grid Corp. of the Philippines’ Calaca-Dasmarinas transmission line expansion project.
The proposed power plant is the third phase of the planned expansion of the Calaca coal-fired plant facility in Batangas.
Energy Secretary Alfonso Cusi earlier declared a moratorium on endorsements for greenfield or new coal power plants following the periodic assessment of the country’s energy requirements.
Cusi said in a statement the Department of Energy’s most recent assessment revealed the need for the country to shift to a more flexible power supply mix.
DOE spokesman Felix William Fuentebella said coal projects listed under the department’s committed power projects were not included in the moratorium because they already secured endorsements.