The Manila Electric Co. (MERALCO) is set to enter the hydropower sector after inking a partnership with Blue Energy Holdings and Management Corp.
In a disclosure, Meralco said it signed a joint venture agreement and shareholders’ agreement with the Tiu Family-owned company.
Under the deal, the two companies will establish a joint venture company to pursue the development of hydroelectric power projects.
The Meralco-Blue Energy partnership forms part of the JV between the power distributor and Repower Energy Development Corp (REDC) of the Tiu family inked last January.
This agreement calls for the partnered construction of mini-hydropower plants using run-of-river resources for renewable and efficient energy productions, marking Meralco’s entry into mini-hydropower development.
The partnership will lead to a series of groundbreaking projects of mini-hydropower plants this year in selected regions, REDC said.
Meanwhile, with the shareholders’ agreement, Meralco will subscribe to 3.12 million shares of the JV firm.
“Said shares represent 50 percent minus one share of the authorized capital stock of the proposed (JV company),” Meralco said.
REDC has a collection of mini-hydropower projects across Quezon, Camarines Sur, Bukidnon and other provinces currently under development with investments worth $400 million and a capacity of over 100 megawatts.
In July 2015, Meralco chairman Manuel V Pangilinan announced the company’s plants in establishing a new unit for RE investments, a separate entity from power generating unit Meralco Powergen Corp.
MGen is eyeing a portfolio of up to 3,000 MW of new capacity from baseload power plants in addressing the increasing energy demand in the country.