Category: Power and Infrastructure

https://www.theceomagazine.com/executive-interviews/utilities-energy/roel-castro/

BY SHAI LAGARDE

MOSCOW—A Brown Company Inc. (PSE:BRN) has entered into a cooperation agreement with private institution Rusatom International Network (RAIN) on June 20, 2017 at the International Forum ATOMEXPO 2017 in Gostiny Dvor. The parties plan to develop economic, scientific and technical cooperation in the field of peaceful use of atomic energy, as well as to jointly explore possible areas of application of radiation technologies in industry, agriculture, and medicine.

The parties also intend to implement a series of activities for enhancing public awareness about nuclear technologies and their application in the Philippines.

Roel Z. Castro, President and CEO of A Brown, signed the bilateral Memorandum of Understanding (MOU) along with Alexander Merten, President of RAIN, during ATOMEXPO’s official program. The parties expressed their confidence that the strategic nature of cooperation creates possibilities for the implementation of joint projects in the peaceful use of atomic energy, and for enhancing public awareness about nuclear technologies and their applications and impact, particularly in the Philippines and neighboring ASEAN economies.

“A Brown welcomes this new opportunity to come up with more diverse solutions toward the improvement of the lives and livelihoods of Filipinos,” Castro said. “This cooperation agreement with RAIN is very much in alignment with President Rodrigo Duterte’s government platforms, as well as our company’s commitment to constantly explore business avenues that would facilitate nation-building.” With A Brown’s latest undertaking, Castro added, “we can look forward to developing various projects for a stronger, more economically robust Philippines.”

Likewise, Merten stated that the MOU is one of the first steps in implementing the agreements reached between the two countries during the meeting of President Duterte and Russian President Vladimir Putin on May 25, 2017. “It opens up great prospects for mutually beneficial cooperation in the development of innovative technologies in the nuclear field,” he said.

A Brown is a key player in real estate and agribusiness in Southern Philippines with investments in mining, infrastructure, and energy, including the 2x135MW coal-fired Palm Concepcion Power Corp. (PCPC) in Iloilo and the 55MW bunker-fired Peakpower Energy Inc. serving various electric utilities in General Santos, Agusan del Sur, and part of Bukidnon. Hydro Link Projects Corp. is developing a hydropower plant in Surigao del Sur. AB Bulk Water Company, Inc. is a bulk water supply project in Opol, Misamis Oriental in partnership with the local government.

Last November, A Brown entered into an MOU with Malaysia’s AlloyMTD for the proposed PNR East-West Rail Project through East West Rail Transit Corp., the Consortium formed by A Brown with Systra Philippines (of France’s Systra Group) and Private Equity Investment and Development (PEID) Corp.

Rusatom International Network is a non-commercial organization in the control loop of Rosatom State Corporation, which decides on the creation, development and management of a network of regional centers. The company’s structure consists of 11 regional centers, the main goals of which are to search new possibilities for business expansion and promote products and services offered by Russian organizations in the nuclear sector. One of the company’s main functions is to coordinate foreign economic activity of organizations included in the control pool of Rosatom State Corporation.

President Rodrigo Roa Duterte led the inauguration of the 135-megawatt (MW) Circulating Fluidized Bed Combustion (CFBC) power plant of Palm Concepcion Power Corporation on Monday, November 28, in Rizal Hall, Malacañang Palace Manila.

The power plant which is located in Concepcion, Iloilo is a baseload power plant which was commercially operated last August 2016 and has contributed significantly in the reliability of power supply in the Visayas.

President Duterte, who was the Keynote Speaker in the event, also led the ceremonial switch-on of the power plant, together with Energy Secretary Alfonso Cusi, PCPC Chairman Dr. Walter Brown, PCPC President and CEO Roel Castro and Advisor to the Board Jacinto Ng, Jr.

Castro in his welcome message, highlighted that the new plant is a combination of technology from Europe and the Engineering, Procurement and Construction (EPC) contractor from China.

“We are among the few to have used this technology with reheat and as a consequence, we are one of the most fuel efficient plants operating and at the same time compliant with the environmental criteria set by both national and international agencies,“ Castro said.

“As a result of using the latest and most efficient technologies, we have one of the lowest tariffs in this same class of plants that the consumers are able to enjoy,” he added.

The power project generated a total investment of about $280 million, one of the biggest investments in Iloilo province. The construction and commissioning of the power plant including the transmission facilities were all completed within 37 months.

One of the highlights of the event is the donation of PCPC to support President Duterte’s program against drugs, which was announced by PCPC Chairman Walter Brown.

Dr. Brown also stressed in his message that the power plant project would not be possible without the full cooperation of its shareholders and partners as well as local and national government officials who on the whole were supportive of the project.

Aside from the plant’s contribution in increasing the available power generation capacity in the Visayas, the community and local government unit hosting the power plant likewise benefitted in the various CSR projects that PCPC poured in for the development of the people and communities and in protecting the environment.  The company invested more than PhP150 million, even before the company sold its first kilowatt, for projects like concrete roads, scholarships, livelihood projects, capability building of the local leaders and residents, disaster preparedness, and more importantly massive reforestation and mangrove development.  On top of this, they are also beneficiaries of different projects under the Department of Energy’s ER 1-94, particularly electrification projects, development and livelihood projects and reforestation, watershed management and environment enhancement, as part of the benefits to host communities.

Secretary Cusi of DOE believes that this power plant will help speed up economic activities in this side of the country.

“The inauguration of this 135-MW Concepcion power plant is a crucial energy infrastructure project to help sustain the economic growth in the Visayas and we expect to have a livelier business environment in the region,” he said.

While the power plant is fueled by imported coal, the company uses circulating fluidized-bed combustion which is the latest in clean coal technology.  It is also equipped with an electrostatic precipitator (ESP), a filtration device that removes over 99% of ash particles.

At present, the power plant is delivering power generation supply to its customers in Panay, Negros and the rest of Visayas.

PCPC is a joint venture between Palm Thermal Consolidated Holdings Corporation (PTCHC), a subsidiary of A Brown Co. Inc. (ABCI), and Jin Navitas Resource Inc. (JNRI).

KUALA LUMPUR—A Brown Company, Inc. (BRN), together with its Consortium partners, has entered into a cooperation agreement with MTD Philippines, a subsidiary of infrastructure conglomerate AlloyMTD of Malaysia, for the development of the PNR East-West Rail Project.

At the signing, Dr. Walter W. Brown, Chairman Emeritus of A Brown, expressed his thanks to the Malaysian and Philippine governments. “We are grateful for the opportunity to be of service to the Filipino working class and commend the current administration for responding quickly to a need that has been postponed for too long,” he said. “We commit to complete the project before the end of the President’s term.”

The project proposal was prepared by East-West Rail Transit Corporation (EWRTC), the Consortium formed by A Brown and Private Equity Investment and Development (PEID) Corporation with Systra Philippines (member of the Systra Group of France) providing the technical assistance. It will be proposed to Philippine National Railways to alleviate the worsening traffic conditions in Metro Manila.

“We see a lack of appreciation of the fact that due to the large volume of cars and the restricted number of roads, the bulk of our people are forced to travel two to three hours each way. So much time and effort is lost. The only way to solve it in the long-term is mass transport. We want to see the use of the most appropriate mode of transport to bring people without cars to their destinations within a reasonable time.”

Mr. Roel Castro, the newly appointed President of A Brown as of September 2016, said that the project aims to provide a “hassle-free service” for the commuters. “For a number of reasons, we’re seeing a lot of problems in the existing trains right now,” he said. “Mass transportation is among the important infrastructure projects that are need-based, and we see a great opportunity there. This is all part of A Brown’s platform for contributing to the country’s development via infrastructure projects. There’s power, water, and transportation.”

A Brown is a key player in real estate and agribusiness in Southern Philippines with investments in energy, mining, and infrastructure. The company has established its expertise in project management through its subsidiaries in the power sector. Palm Concepcion Power Corporation (PCPC) is a 135MW coal-fired plant in Iloilo with a second unit in the pipeline. Peakpower Energy Inc. (PEI) has two bunker-fired peaking power plants: Peakpower Soccsargen Inc. in General Santos and Peakpower San Francisco in Agusan del Sur with a third plant in Bukidnon currently in the preparation stages. These projects were established to supplement the shortfall in the electricity supply of the region. Hydro Link Projects Corporation is developing a hydropower plant in Surigao del Sur. Also underway is the bulk water supply project of A Brown in Opol, Misamis Oriental in partnership with the local government to finally address the town’s need for its independent water supply system.

On the other hand, MTD Philippines, through AlloyMTD Malaysia, is a leading Asian infrastructure conglomerate operating in the global market, actively present in Saudi Arabia, UAE, USA, UK, Australia, Indonesia, Singapore, Sri Lanka, India, Thailand, Chile, China, and the Philippines. The company has a vast experience in civil engineering and construction, manufacturing, infrastructure concessions, energy, port operations, real estate and property development, and operations and maintenance. Among its successful projects in the country is the rehabilitation and expansion of the South Luzon Expressway.

“The East-West rail project is something that Metro Manila needs urgently because in involves moving people in big quantities. I think it’s a very important corridor because it connects to MRT7 and LRT1 and has a promising volume of riders,” said Engr. Isaac David, MTD Chairman. “We want to participate in this effort towards solving the traffic congestion. MTD is confident with the Consortium’s track record and are excited to be partnering with them.”

PEAKPOWER Energy, Inc. expects its plant expansion in General Santos City to start operating by yearend, while it targets another plant in Bukidnon to launch by end-April 2017, its parent firm said.

A Brown Co., Inc., which owns 20% of Peakpower Energy, also disclosed in its financial report that a third plant in Agusan del Sur will start commercial operations for a new unit by the end of May 2017.

The listed diversified company houses its investments in bunker-fired power projects under Peakpower Energy, which was formed in 2013 to generate peaking power for electric cooperatives in Mindanao.

Peakpower Energy has three wholly owned subsidiaries on the island, each holding build-operate-maintain-and-transfer agreements for new plants that will last for 15 years through its subsidiaries.

PeakPower Soccsargen, Inc., which has a 20.9-megawatt (MW) diesel/bunder-fired power plant in General Santos City, has started its 13.9-MW expansion and is awaiting the delivery of two units of Wartsila engines by next month.

“Target commercial operations for the new units will be end of December 2016,” the parent company said.

The subsidiary has a 15-year agreement with the South Cotabato II Electric Cooperative, the largest distribution utility in Mindanao with a franchise area covering General Santos City, the municipalities of Polomolok and Tupi in South Cotabato. It launched in January last year.

Peakpower San Francisco, Inc., with a 5.2-MW diesel/bunder-fired power plant in San Francisco, Agusan del Sur, is also awaiting the delivery next month of a single unit Wartsila engine.

The plant has a 15-year agreement with Agusan del Sur Electric Cooperative, Inc. whose franchise area covers 13 municipalities including Bayugan City. The new unit is expected to start operating by May 2017.

“San Francisco serves as the primary commercial and service center in the province of Agusan del Sur, being situated at the crossroads leading to other production centers in the region,” A Brown said.

The subsidiary in Manolo Fortich, Peakpower Bukidnon, Inc., will be the first to start commercial operation, by the end of April 2017. Its 10.4-MW diesel/bunker-fired power plant has a 15-year agreement with Bukidnon II Electric Cooperative, Inc., which serves the highlands of the province.

A Brown said another unit, Palm Concepcion Power Corp. (PCPC), is in the initial stage of pre-construction activities of the second 135-MW coal-fired power plant in Concepcion, Iloilo.

“Construction is estimated to take two to three years after commissioning of the first unit,” A Brown said.

PCPC’s plant site and support units are programmed for two units of power generators. The first unit has been synchronized with the Visayas grid as of May 2016.

“Full commercial operations are slated on the last week of August 2016, delivering power supply to Panay, Negros, and the rest of Visayas,” the parent firm said.

It added that 10 distribution utilities and electric cooperatives have signed up with PCPC for their baseload power capacity needs.

For its power generation outlook, A Brown said that even with the additional 135 MW of supply PCPC’s second unit, a deficit still looms from November 2017 onwards.

“By 2020, projections are showing a shortfall of about 700 MW with no power projects projected to start operations after September 2016. With a supply deficit for the projected demand growth of the region, there is plenty of room to invest in the Visayas power market,” it said. —Victor V. Saulon, BusinessWorld