Global Business Power Corporation is lining up massive capital outlay of $600 million this year for the completion of and to bring on stream its programmed power projects in Cebu and Iloilo City.

“For 2010, Global Power still needs to spend about US$600 million to complete the projects,” company president Jesus N. Alcordo indicated, referring to the 246-megawatt Toledo coal-fired plant and the 164-MW undertaking of affiliate Panay Energy Development Corporation in Iloilo.

The company placed the aggregate cost of both projects at $880 million, with the bulk of capital expenditures (capex) this year.
Financing for both projects are already fully covered with loan agreements inked previously, mostly with local banks.

The Cebu project will be financed by the proceeds of a P16 billion syndicated peso-denominated loan secured last year; while the Iloilo project has to be covered by the P14 billion facility sealed with local creditors.

For the first of the three 82-MW each units of the Toledo facility, Alcordo shared to media that its commissioning is on target and the capacity is scheduled for synchronization into the grid during the first quarter. The second and third units are expected on-line by June and toward the year’s end.

The first unit of the Iloilo facility, on the other, will start augmenting supply in the Panay grid by October while the second unit is scheduled on stream next year.

“The timely completion of the two power plants is in line with our commitment to immediately address the worsening power crisis in the Visayas,” Alcordo stressed.

The commissioning of the Todelo facility’s first unit is seen easing supply bottlenecks in Cebu – a dilemma which has been punishing the grid most especially last year.

When both plants will finally shore up supply to the grid, it has been emphasized that the Visayas grid’s long-term woes of power interruptions will be assuaged for some time.

Capacity shortages have long been a headache for government, especially for the Department of Energy (DOE), which is the responsible agency in ensuring the country’s reliable and efficient electricity supply.

With merchant market taking reign in the deregulated power industry, pressure on DOE and the Philippine Electricity Market Corporation (PEMC) are also intensifying to finally declare the commercial operation of the Wholesale Electricity Spot Market (WESM) in the Visayas so investors can count on an alternative market for their capacity.

That particular policy direction in the industry is caught in a chicken-and-egg dilemma, because of government fears that the spot market’s opening may be marked by price spikes which may trigger shock on consumers.