National Transmission Corporation (TransCo) president and chief executive officer Alam T. Ortiz surmised that the financing program could be tapped through the Miyazawa fund of the Japan Bank for International Cooperation.
While an accelerated implementation of the transmission link-up is still generating "mixed reactions" from array of stakeholders, he noted that what appears as general sentiment is that the project has to be pushed, also to ensure successful operation of the Wholesale Electricity Spot Market (WESM) where one of the trading floors will have to be set up in the Visayas by next year.
"Some sectors still find it expensive, but to make WESM really work," he noted that the Japanese lending firm may consider setting out new credit window for the Philippines that would also relate to the planned expansion of capacity of geothermal assets in Leyte and other targeted areas in the Visayas.
If the JBIC portfolio would not be enough, he stressed that an option would be to seek arrangement for a pool fund that may also include other multilateral lenders, such as the World Bank.
On propping up geothermal capacity in the Visayas, energy officials are keenly pursuing the proposed $200-million Cabalian integrated geothermal steamfield and power plant project of the Philippine National Oil Company-Energy Development Corporation to partly serve as anchor load for the Leyte-Mindanao transmission interconnection. This is expected to add 100 megawatt capacity to the energy-short areas of the Visayas.
The project’s blueprint was already submitted to the National Economic Development Authority’s Investment Coordination Committee (NEDA-ICC); and is just awaiting approval.
On the transmission line link-up, the project cost was originally set at around $375 million; but since this was drawn five years ago, TransCo has contentions that this may have already changed.
The Department of Energy (DoE) has deferred for several times the project’s implementation; as they are trying to weigh options on whether or not it would be more cost-effective to pursue it or just entice new investment in power plant projects to meet future electricity demand in Mindanao.
But the spinoff transmission firm has been consistently pushing for its implementation, believing that this is the ultimate solution it can provide to spare the country from any undesirable scenario of power outages that may hit Mindanao in the immediate term.
It would be noted that local government leaders in Mindanao have been prodding energy officials to push for a more immediate implementation of the transmission project; as they expressed fears that delaying it may result in shortage in their power supply in two years time.
Even with the 200megawatt Mindanao coal power project coming on stream in 2006; it is believed that this capacity addition would not be enough to plug the gap of the projected power supply shortfall that is seen hitting the area soon; particularly in the southeastern growth corridor, as has already been admitted previously by the energy department.
Forecasts have placed demand growth in Mindanao at average 7.0-percent annually; expected to be brought mainly by the heavy flow of in-migration from other less peaceful parts of the island; the reoperation of the National Steel Corporation (NSC) and the influx of possible new investments in the area.
If committed projects are to be implemented and set on stream without delays, it was stressed that supply gaps can still be closed; at least by a 50-MW capacity addition in 2005; and by plant enhancements of existing hydro power plants which will likely contribute additional 211-MW capacity from 2005 to 2007.
