MRC ALLIED, Inc. has entered into a memorandum of understanding (MoU) with a Chinese firm to look into the renewable energy projects in the Philippines that have been identified by the local company.
The listed miner and property developer, which has diversified into renewables, told the stock exchange it inked the MoU with China energy engineering group Guangdong Power Engineering Co., Ltd. (GPEC).
GPEC is described as a Guangzhou-based company engaged in the exploration, development and construction of energy projects.
MRC Allied said the MoU confirms both parties’ interest in developing renewable energy projects in the Philippines.
Sought for details of the discussions, MRC Allied President Gladys N. Nalda said the MoU would allow GPEC to look into the renewable energy projects of the company “and explore possible partnerships to implement these projects.”
She said this is only a preliminary deal, but both parties expect “to execute a more concrete and definitive agreement” before the end of the year.
Shares in MRC Allied rose 2.99% to close at P0.345 each on Thursday.
In its disclosure, MRC Allied said GPEC will conduct due diligence for one year from the signing.
“The purpose of the due diligence is to allow GPEC to make a decision to pursue renewable energy projects with MRC,” the company said.
“The parties are bound by the terms and confidentiality,” it added, citing this to continue while the MoU is in force and within one year thereafter.
MRC Allied, which has recently took in Former Energy Secretary Carlos Jericho L. Petilla as independent director, earlier this month entered into a similar agreement with Merge Energy and Environment Corp. (MEEC).
It described MEEC as “a domestic private corporation engaged in the business of exploration and development of renewable energy resources such as but not limited to biomass, geothermal, oil and gas.”
Ms. Nalda previously said that MRC Allied was looking at “orphan” plants or those that failed to secure a guaranteed feed-in-tariff (FiT) in the race to subscribe to the installation target set by the Department of Energy for solar, wind, biomass and run-of-river hydroelectric power projects.
Last month, MRC Allied announced an ambitious target of putting up at least 1,000 megawatts (MW) of renewable energy (R.E.) in the next five years.
Ms. Nalda said the target capacity is in line with the company’s vision to be one of the “major players in the Philippine power industry” by 2022.
For 2017, the company has a total 160-MW capacity in the pipeline. These are solar farms Clark Green City, Pampanga and in Naga City, Cebu, with a target installed capacity of 100 MW and 60 MW, respectively.
The company’s renewable energy projects are to be pursued mainly through its subsidiary Menlo Renewable Energy Corp. and other affiliates.
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.
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.
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 targeted to supply electricity to the Visayas grid or offer its output to large power consumers within and around southern Cebu.
To fund the energy projects, the company is planning to raise funds either on its own or with strategic partners, Ms. Nalda had said.