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MRC Allied diversifies into energy with 1,000-MW target

As published in BusinessWorld Online

PROPERTY DEVELOPER MRC Allied, Inc. is diversifying into the energy sector and is aiming to join the big league with an ambitious target of putting up at least 1,000 megawatts (MW) of renewable energy in the next five years, its top officials said.

MRC Allied's renewable energy projects, which includes 100-MW solar power plant inside the Clark Green City in Tarlac, will be pursued mainly through its subsidiary Menlo Renewable Energy Corporation (MREN).

MRC Allied President Gladys N. Nalda said now is the “perfect time” to venture into the energy sector because of the rising demand for electricity, increasing target of renewable energy (RE) capacity and the opportunity to buy existing power plants. “In line with our vision to be one of the major players in the Philippine power industry, we plan to develop at least 1,000 megawatts of clean and renewable energy by 2022,” said Ms. Nalda, who is also the company’s chief executive officer. “For this year, we have an aggregate of 160 megawatts solar capacity in our pipeline,” she told analysts and reporters on Friday night after the company’s annual stockholders meeting at Manila Polo Club in Makati City. The projects in the pipeline are in Clark Green City, Pampanga and in Naga City, Cebu, with a target installed capacity of 100 MW and 60 MW, respectively. Ms. Nalda said the company’s renewable energy projects are to be pursued mainly through its subsidiary Menlo Renewable Energy Corp. and other affiliates. She said MRC Allied, through Menlo, recently launched a partnership with the Bases Conversion and Development Authority (BCDA) and Sunray Power, Inc. to develop a 100-MW solar power plant inside the Clark Green City, the envisioned environment-friendly city, that approximates the development of Bonifacio Global City in Taguig City. She said the P5-billion project has a power supply agreement plus a long-term lease with BCDA. It is connected to the National Grid Corporation of the Philippines’ transmission line. The project is expandable by 60 MW, she said. In Cebu, subsidiary Menlo is planning to build the P3-billion, 60-MW solar farm within MRC Allied’s property in Naga City. The project is targetted to supply electricity to the Visayas grid or offer its output to large power consumers “within and around” southern Cebu. The 160-hectare industrial estate in Naga City is one of the company’s two principal assets. The estate, named New Cebu Township One, is registered with the Philippine Economic Zone Authority (PEZA) as a special economic zone. It is 35 kilometers from the Mactan International Airport. The second property asset, known as Amihan Woodlands Township, is a 732-hectare raw land in San Isidro town, Leyte. It is also registered with PEZA as an eco-residential and eco-tourism project with economic zone status. To fund the energy projects, the company is planning to raise funds either on its own or with strategic partners, Ms. Nalda said. “We will aggressively explore all available options to raise capital and finance our RE projects,” she said. This year, the company plans to issue preferred shares for its funding requirements apart from an earlier plan to conduct private placement. Ms. Nalda said the company expects to generate a combined P2 billion from both capital raising moves, while another P1 billion is expected to be raised from other sources, including institutional investors. The company will increase the number of board directors to accommodate at least three independent directors, she said. In its corporate profile, MRC Allied has named seven board members, including Zenaida Y. Monsada, former secretary of the Department of Energy under the latter part of the Aquino administration. Ms. Nalda served as vice-president for legal and corporate affairs of state agency PNOC Renewables Corp. She was also legal counsel of the Energy department.

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