Mabuhay Energy earmarks around P500 million for solar, hydro projects
Angelica Y. Yang
RETAIL electricity supplier Mabuhay Energy Corp. (MECO) has set about P500 million for this year’s capital expenditures (capex), including the budget for its solar and hydro projects.
MECO Chief Executive Officer and Chairman Sherwin G. Hing said the capex covers the firm’s solar farm, which is set to break ground in September in Bulacan, an 80-megawatt (MW) hydro plant in Lanao del Sur, and several embedded generation projects.
“(The) solar farm is through Excell Energy. It is the subsidiary that’s purely doing solar for now… It’s gonna be a joint venture with a company that has the property in Bulacan so we’re looking at groundbreaking sometime in September,” Mr. Hing told BusinessWorld in a video call on Wednesday.
He said MECO is currently using internal funds for the capital spending, but said that the company was looking into a debt-equity financing scheme after talks with investors.
According to Mr. Hing, the firm’s planned solar farm will have a capacity of up to 20 MW.
Excell Energy is one of the firm’s partners that focuses on optimizing energy costs through the use of distributed energy sources, according to MECO’s website.
“[Our] hydro project is in Lanao del Sur, it’s an 80-MW project. One of the shareholders of this company has already started the project and we’re in discussions [on] MECO acquiring a part of that company,” Mr. Hing said, adding that the project has already passed the pre-construction stage, and that it will begin “very soon.”
Part of MECO’s capex is also set to go to its embedded generation project, Mr. Hing said.
In a separate e-mail, MECO Vice-President and Head of Sales Jacqueline Castillo said that the firm “remains committed to developing and owning assets in the renewable energy sector, which would enable it to generate 100 MW soon.”
Asked about the possible distribution of renewable assets, Mr. Hing said on Wednesday that there’s no set ratio yet, but he believed that solar will “initially dominate the portfolio.”
“I think it will be solar since solar is going to be much faster to build and we also need to catch up based on the internal demands of MECO. We believe initially the next 3 [or] 5 years, solar will be… dominating in the portfolio then hydro will catch up eventually,” he said.
Mr. Hing said that the company has long-term plans of building its power generation business so it won’t be “too dependent on power supply agreements from independent power producers.”
“It’s part of our strategy really that a portion would be coming from our own, and a portion will come from the power supply agreements — just to spread the risk and then the rest or a portion of that will be from the WESM (wholesale electricity spot market),” he explained.
At present, MECO is selling around 30 to 40 MW of capacity per month to 16 of its customers. The firm began its commercial operations in June 2020, and obtained its RES license from the Energy Regulatory Commission in December 2019.
MECO, a wholly owned subsidiary of the Aviva Group of Companies, has based its pricing mechanism after Japanese RES companies. According to the firm, the mechanism “allows MECO to provide the most options in the market to customize its pricing and supply.”