MRC Allied to venture into energy

As published on Rappler

Not all power projects would be built from scratch as MRC Allied is open to acquiring or partnering with existing renewable energy developers

MANILA, Philippines – 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.

Dolphin Fire Group, an investment house owned by Menlo Capital Corporation, has a stake in Rappler. MRC Allied director Bernard Rabanzo is one of the largest shareholders in Dolphin Fire. – Rappler.com