Meralco eyes power plant project in Vietnam

Significant minority interest in foreign venture

By Amy R. Remo
Philippine Daily Inquirer
5:37 am | Wednesday, October 31st, 2012
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MANILA, PhilippinesManila Electric Co., the countrys biggest power distributor, is planning
to go into the power-generation business in Vietnam as part of its long-term plans to expand its
operations abroad.
Although only preliminary talks were underway, Meralco chairman Manuel V. Pangilinan told
reporters on Monday that they have yet to firm up their assessment of the potential Vietnam
market.
I think wed take modest steps in Vietnam. Of course the numbers [have] to work for us, so as
of the moment, we have no clue as to what numbers will work. But the arrangements seem to be
quite reasonable because the power will be bought by the government through EVN (VietNam
Electricity), Pangilinan explained.
He added that initially, Meralco was looking at projects that would range anywhere from a
minimum of 150 megawatts (MW) to 600 MW. Preferably, the distribution utility would want to
have a significant minority interest in the partnerships that may be formed with prospective
Vietnamese partners.
Why minority? We dont have first-hand experience of how business operates in Vietnam,
especially in the regulatory aspect. So its better to take certain baby steps first, Pangilinan said.
Meralco president and CEO Oscar S. Reyes had said that Meralco was looking at potential
projects even outside the Philippines to enhance the companys profitability and showcase the
technical competency of its engineers, technical and customer service people.
Locally, Meralco, through its power-generation arm Meralco PowerGen, is building a 2,700-MW
portfolio that would consist of 1,200 MW of coal-fired facilities and 1,500 liquefied natural gas-
fed power plants.
The first 600-MW coal facility is being put up at the Subic Bay Freeport in partnership with
Aboitiz Power Corp. and Taiwan Cogeneration, through a vehicle company called Redondo
Peninsula Energy (RP Energy).
The $1.28-billion Subic facility is Meralcos initial venture in its re-entry to the power-
generation business. Development activities are continuing as the company hopes to operate the
first 300 MW plant by the first half of 2016.
As for its LNG plans, Meralco earlier said that it was considering two locationsQuezon and
Batangas.