Meralco PowerGen Corp. (MGen), the power generation arm of Manila Electric Co. (Meralco), has unveiled a USD 2 billion plan to develop two coal-fired power plants in Quezon and Cebu, signaling a potential boost in the country’s power capacity.
MGen President and CEO Emmanuel Rubio disclosed in a press briefing that four local banks and two Indonesian lenders have expressed interest in financing the 1,200-megawatt (MW) Atimonan project in Quezon and the 80-MW Toledo project in Cebu.
Rubio highlighted the scale of the investment, estimating the cost at $1.6 million per MW. “For the combined 1,280 MW capacity of both plants, we are looking at a total capital outlay of $2 billion,” Rubio said.
Both projects have already secured environmental compliance certificates from the Department of Environment and Natural Resources (DENR). MGen is currently evaluating the financial viability and competitiveness of the projects, with plans to secure board approval by February 2025 if assessments prove favorable.
“We’re running the numbers to see if it could be viable and competitive, and if we can do that, we’ll go for a board approval,” Rubio said, adding that the subsequent steps would include a competitive selection process (CSP) for project contractors and suppliers.
Discussions with potential contractors are ongoing. Rubio confirmed two candidates for the Atimonan project and noted that Formosa Heavy Industries, the original supplier, is under consideration for the Toledo project.
However, the projects hinge on government approval to exempt them from the coal moratorium imposed by the Department of Energy (DOE) in 2020. The moratorium restricts the development of new coal plants but allows exceptions for operational facilities or projects with substantial progress and clearances.
The Atimonan project is included in the DOE’s list of committed power facilities, while the Toledo project, under MGen subsidiary Toledo Power Corp., had already received permits to construct additional units.
MGen’s existing coal portfolio includes the 500-MW San Buenaventura Power plant in Mauban, Quezon; the 246-MW Cebu Energy Development Corp. in Toledo, Cebu; and Panay Energy Development Corp.’s facilities in Iloilo City, with capacities of 164 MW and 150 MW.
Together with its investments in liquefied natural gas, diesel, and solar power, MGen boasts a total gross generation capacity of 2,425 MW, meeting baseload, intermediate, peak load, and ancillary energy demands.
Coal remains a contentious issue due to its environmental impact, but Rubio emphasized the role of these plants in ensuring energy reliability. “Coal remains a dependable source of baseload power, ensuring an uninterrupted supply for the growing demands of the economy,” Rubio said.
Environmental groups, however, remain cautious. They argue that investments in coal could contradict the Philippines’ commitments to renewable energy and carbon neutrality.
The final decision on the projects will be shaped by regulatory compliance and financial assessments. “Our priority is to ensure these projects contribute to a stable and cost-effective power supply for the nation,” Rubio concluded.
