The much-awaited rehabilitation of the Agus-Pulangi hydroelectric power plant system in Mindanao will finally push through after the World Bank (WB) approved its $700,000 (around Php33.4 million) financing to jumpstart preparations for the project.
Based on a Philippine Daily Inquirer report, the WB’s financing will particularly go to the government-run National Power Corporation (NAPOCOR), so it can begin the preparation for the project’s feasibility study and tender documents. NAPOCOR manages the Agus-Pulangi hydropower system.
Once the preparation is finished, the WB would lend the government an initial $100 million (around Php4.78 billion) to cover part of the $150 million (around Php7.17 billion) project cost for one of the rehabilitation projects.
The entire project, which had been previously estimated to cost $300 million (around Php14.3 billion), will be jointly implemented by NAPOCOR and fellow government firm Power Sector Assets and Liabilities Management Corporation (PSALM).
PSALM is mandated under Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA) to privatize NAPOCOR’s assets.
The WB said the rehabilitation of the power plants is expected to enhance the reliability of clean energy generation in Mindanao.
Finance Sec. Carlos Dominguez III said that the government was looking for different financing mechanisms to allow the government to enhance the generating capacity of the Agus-Pulangi hydropower plants and acquire coal-fired power plants, so they can be repurposed to increase renewable energy capacity.
Dominguez had wanted to rehabilitate the power plants since 2017. He also wanted to build an integrated liquefied natural gas facility to boost reserves and offset the depletion of the Malampaya gas field.
The Agus-Pulangi rehabilitation was initially pitched for possible Chinese financing before the WB loan came about in 2019.