Meralco PowerGen Corporation’s Redondo Peninsula Energy Inc. (RP Energy) received its certificate of registration for its 600-megawatt (MW) Subic-based coal-fired plant from the Board of Investments (BOI).

The company is now negotiating on the engineering, procurement and construction contract for the first phase of the project, which covers the first 300 MW of the coal-fired power plant.

“The registration entitles RPE to duty-free importation of equipment, materials and spares used for the power plant for a period of five years from date of registration. Also income tax holiday for four years from commercial operation,” RP Energy project development manager Joselito Lantin said on Friday.

Lantin said that construction of the phase one of the project is set for the last quarter of 2016, while expected operation is between late 2019 to early 2020. He also added that the contract will include a second 300 MW unit.

“We will do 300 MW and then [expand to] 600 MW, depending on our capability to interconnect with NGCP [National Grid Corporation of the Philippines]. It just takes a few months before you can start the phase two,” Meralco PowerGen chairman Manuel Pangilinan said earlier.

Power generated by this project will be covered by a separate power supply agreement within the Manila Electric Co. (MERALCO) accounting for 225 MW and 75 MW for Aboitiz Energy Solutions.

Initially, RP Energy was supposed to establish a 600 MW coal plant but was stopped to review its options due to transmission constraints. Meralco PowerGen was supposed to begin construction after the Supreme Court dismissed the Writ of Kalikasan case filed by pro-environmentalist groups against the Subic coal plant and upheld the project’s Environmental Compliance Certificate and the lease and development deal with SBMA.

Meralco PowerGen is the power generation arm of Meralco, the country’s biggest power distributor, and owns a majority stake in RP Energy.