Infrastructure & PPPs in Philippines - Q1 2022 Update
YOG INFRA Q1 2022 insight series
PHILIPPINES has announced new projects in traditional sectors of transport, energy and WASH (water projects). The market remains primarily dominated by local players; and there are some partnerships being done with international players for emerging or new sectors (e.g., a planned data center PPP) wherein the local players do not have the technical capability.
Read more about key developments in Infrastructure and PPPs in Philippines in our latest insight.
PHILIPPINES' KENNON ROAD PPP DRAWS INTERNATIONAL INTEREST
Japan's JFE Engineering Corporation and China First Highway Engineering are among potential bidders that have submitted expressions of interest (EoI) for the Philippines’ PHP 11 Bn (USD 214 Mn) Kennon Road upgrade public-private partnership (PPP).
The others included local construction companies First Balfour and Riofil Corporation. The DPWH is set to submit the Kennon Road project to the Investment Coordination Committee of the Philippines’ National Economic and Development Authority (NEDA) for final approval.
The project requires the widening of the 33km road, an upgrade to about 18 bridges, and the construction of slope protection. The road, which connects Rosario to Baguio city, is often cut off by landslides and rock-falls. The improved toll road will reduce the travel time between the two cities to three-and-a-half hours from five hours.
ORMOC TO LAUNCH USD 111 MN WATER PPP IN 2Q
The Philippines city of Ormoc is set to request pre-qualification bids for a PHP 5.7 Bn (USD 111 Mn) water supply PPP in May or June 2022. Up to four companies, including a Chinese firm, have submitted expressions of interest for the public-private partnership.
Investors are seeking PPP opportunities led by local authorities in the Philippines, amid a perceived reluctance from the central government to involve private capital in the infrastructure sector.
The Ormoc water supply project involves the building of new water sources and construction, as well as supply facilities. It will include a 40-year concession period. The city's current water supply is at 52 million litres per day. Consumption will rise to an estimated 78.8 million litres per day by 2045.
PHILIPPINES TO IMPLEMENT INFRASTRUCTURE PROJECTS IN BATANGAS VIA PPP
The government of the Philippines is planning to develop and implement infrastructure projects in Batangas via the public-private partnership (PPP) route.
The PPP Center has signed an agreement to offer technical assistance for the province’s PPP projects. Among the identified PPP projects are the township and livelihood cluster development project, and the Batangas regional food terminal (RFT) port project, a sub-component of the proposed RFT.
The PPP Center works to support local implementing agencies, including government units, to roll out local PPP projects.
PHILIPPINES MARKET PPP SET FOR SECOND QUARTER
Baguio City in the Philippines aims to launch a Swiss Challenge for a PHP 5 Bn (USD 97 Mn) market redevelopment PPP in the second quarter of the year 2022. The government is scheduled to finalize negotiating the concession terms with the original proponent.
The local government will draft the terms of reference for the auction afterwards. The redevelopment involves upgrading the marketplace into two separate sections, one of which will be managed by the government and the other can be used by the concessionaire to develop commercial space that will help it recover its investment.
PHILIPPINES WATER SUPPLY TENDER SET FOR Q3 2022
Bislig city, on the Philippine island of Mindanao, aims to launch a water supply PPP in Q3 2022. It will draft the tender documents jointly with the Philippines' PPP Center.
The National Economic and Development Authority, the country’s economic planning body, will launch a roadshow to attract local and international investors after the feasibility study is completed. Estimates of the cost will be revealed after the preparatory study is done.
The project will include the development of new water sources and the construction of septage treatment facilities. It will aim to reduce non-revenue water - which refers to water lost in the distribution process - to 10% from the present 26%.
PHILIPPINES' ILOILO SEEKS WASTE-TO-ENERGY PROJECT PROPOSALS
The Philippines city of Iloilo is looking for proposals from the private sector to develop a waste-to-energy facility. The government has not set a deadline for submissions or a timeframe to award the project.
The Metro Pacific Investments Corporation (MPIC) conglomerate had previously expressed interest in investing in the site but decided not to move forward.
MERALCO TO BID 850 MW OF RENEWABLE SUPPLY
Philippines utility Manila Electric Company (Meralco) is calling for bids for 850 MW of solar and battery supply after receiving an unsolicited proposal from a local joint venture. Proponents should own 600 MW of capacity coming online no later than February 2026, and an extra 250 MW should be completed one year later.
The preferred bidder will sign a 20-year supply contract with Meralco with an initial rate of PHP 6.08 (USD 0.11) per kWh. The projects should be located in the provinces of Batangas, Cavite, Bulacan, Nueva Ecija, Tarlac or Zambales, on Luzon island.
PHILIPPINES TO DEPLOY 2 GW RENEWABLE POWER
The Philippines will deploy a total of 2 GW of renewable power in the country. This includes 1,260 MW of solar PV with 900 MW in Luzon, 260 MW in the Visayas, and 100 MW in Mindanao of solar photovoltaic capacity.
Within the above-mentioned locations, solar photovoltaic is dominant and majorly available. Wind power of 380 MW, the biomass of 230 MW, and hydropower of 130 MW capacity. The Philippines has a total installed power capacity of 20 GW out of which 14.3 GW is in the Luzon area. The Luzon also has the three largest grids in the country.
The Philippines aims to have 35% of renewable energy share by 2030 and increase that to 50% by 2040. The country also plans to launch the Green Energy Tariff Program auction. The auction program will be conducted by the Philippines Department of Energy and it will feature a ceiling price for renewable power generated with tendered projects. The country aims to install a 15 GW capacity of clean energy by 2030.
AC ENERGY IN ALLIANCE FOR 200 MW PHILIPPINES SOLAR PROJECT
A joint venture between Philippines' AC Energy Corporation and CleanTech Global Renewables will develop a solar power project of around 200 MW in Cagayan province. Manila-listed AC Energy, subsidiary ACE Endeavour and a unit of CleanTech Global have agreed to own 55%, 5% and 40%, respectively.
The development will be located in the Lal-lo municipality of Cagayan and will be built in two phases: The 133.5 MW first and a 60.5 MW second phase. The two phases are likely to start operations during the first quarters of 2023 and 2024, the development will sell power to AC Energy's customers and in the Philippines electricity market.
PHILIPPINES TO TENDER USD 190 MN HOUSING PROJECT AS PPP
The Philippines will use a public-private partnership (PPP) scheme to develop a PHP 10 Bn (USD 190 Mn) affordable housing project in the region of Central Luzon. Phase one will cost PHP 3Bn, including land value.
The BCDA plans to start building a 34.5ha affordable housing project in New Clark City, in Tarlac province, in the first half of 2023. The site will be divided into five phases and will include mixed-use residential and commercial areas.
PHILIPPINES DATA CENTER JOINT VENTURE TO BUILD LUZON FACILITY
A joint venture between Manila-listed Globe Telecom, Ayala Corporation and Singapore’s ST Telemedia Global Data Center is set to develop its first data center facility in the Luzon region of Philippines.
KarmanEdge, the data center joint venture, has allocated Globe’s FairView site in Quezon City, Metro Manila for developing and building a facility, The joint venture will explore all funding options moving forward, including equity, debt and asset sales to beef up its capital for growth.
KarmanEdge currently owns assets with a capacity of up to 20 MW in the Philippines and seeks to expand by up to 100 MW capacity in the medium to long term.
List of key transactions - Philippines Q1 2022
Source: YOG INFRA analysis, Public Information
ABOUT YOG INFRA
Our objective is to drive economic growth and make positive social impact through sustainable infrastructure development.
YOG INFRA is an infrastructure focused financial advisory firm. We work with Developers and Development Finance Institutions (DFIs) and help them make informed investment decisions across infrastructure development lifecycle.
With our offices in Singapore and India, we work on projects globally, and the team brings strong experience in supporting development of infrastructure projects.
©2022 YOG INFRA. All rights reserved.