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Infrastructure & PPPs in Philippines - Q4 2022 Update

PHILIPPINES intends to notify bold plans such as Regional Development Plan, the Public Investment Program for 2023-2028, and the Three-year Rolling Infrastructure Plan for 2024-2026; wherein a significant share of investment will be done through PPPs. Among the active sectors, we see transactions across airports, renewable energy, WASH etc.

Read more about key developments in Infrastructure and PPPs in Philippines in our latest insight.

 

October 2022

PHILIPPINES ASKS AIRPORT UNSOLICITED BIDDERS TO RESUBMIT PROPOSALS

The Philippine government is asking the proponents of the unsolicited bids for the concessions to upgrade, operate, and maintain the provincial airports in the country to resubmit the proposals as soon as possible.

According to the Private Public Partnership (PPP) Center, the agency that oversees all PPP projects in the Philippines, Aboitiz Infra Capital, the unit of local conglomerate Aboitiz Equity Ventures, submitted its unsolicited proposal for the New Bohol International Airport. Chelsea Logistics and Infrastructure Holdings Corp, on the other hand, submitted its proposal to modernize the Davao International Airport. Both unsolicited proposals were reviewed by the National Economic and Development Authority during the previous administration.

Under Philippine law, unsolicited proposals are subject to a Swiss challenge. The government is offering 10 provincial airports for privatization under the PPP scheme:

  1. Bohol-Panglao International Airport

  2. Laguindingan International Airport

  3. Bicol International Airport

  4. Iloilo International Airport

  5. Puerto Princesa International Airport

  6. Davao International Airport

  7. Bacolod-Silay International Airport

  8. Kalibo International Airport

  9. Busuanga Airport

  10. Siargao Airport


TOTALENERGIES ENEOS TO BUILD 14 MW PHILIPPINES ROOFTOP SOLAR

A joint venture between TotalEnergies and Japan's ENEOS Corporation will develop a 13.8 MW rooftop solar project in the Philippines for beverage and industrial packaging company Asia Brewery. The solar panels will provide 24% of the power needs of one of Asia Brewery's manufacturing sites and will be one of the largest single-site rooftop solar projects in the Philippines built under the no-capex business model.

According to the no-capex model, the customer does not invest any capital in the solar project and just pays for the power while TotalEnergies ENEOS invests in the power project and operates it. The rooftop solar project is due to start operating in the fourth quarter of 2023, it will be financed through equity while debt will be added in 2024.

The project will see more than 24,000 solar panels installed that will generate approximately 20,000 MWh of renewable energy annually, reducing the company's carbon footprint by about 9,600 tons of CO2 emissions annually. Asia Brewery will pay for the electricity generated over 9 years.


PHILIPPINES MUNICIPALITY PLANS MARKET SOUNDING FOR WATER SUPPLY PPP

The Baggao municipality in the Philippine province of Cagayan is inviting private sector investors to a market sounding, for a water supply system, to be built in a public-private partnership (PPP). The project involves the design, financing, construction, operations and maintenance of the system, which includes development of a water resource, its treatment, pumping, storage, transmission, distribution, billing and collection.

The market sounding, to solicit insights and feedback on the terms of the PPP, will be held at the PPP Center Office in Quezon City.


MAINSTREAM AND ABOITIZ PARTNER FOR PHILIPPINES WIND PROJECT

Mainstream Renewable Power has signed a joint venture agreement with Metro Manila-based Aboitiz Power Corporation to generate renewable energy in the Philippines. The partners will initially develop the 90 MW Libmanan onshore wind project, located in the Camarines Sur Province of the Southeast Asian nation. It is expected to reach financial close in 2023 and start operations in 2025. This will be Aboitiz Power's first wind energy development in the Philippines.

Aboitiz Power will own 60% of the asset while Dublin-headquartered Mainstream will own the remaining. The partners expect the joint venture will play a role in the government’s drive to increase renewables generation, primarily from wind and solar assets.

Philippines is seeking to grow its renewable energy capacity to 35% of its overall energy mix by the year 2030, compared with 24% in 2020.


CORO ENERGY TO BUILD A 100 MW WIND FACILITY IN THE PHILIPPINES

United Kingdom-based Coro Energy Public Limited Company has received approval from the Government of the Philippines for its 100 MW wind project in Cebu. With the area of interest (AOI) secured, the developer is authorised to proceed with the submission of a wind energy service contract application.

As a part of the project, the company will install wind turbines in an area covering 4,617 hectares in the municipality of Oslob. Coro Energy will now enter the formal permitting process and install a met mast to gather wind data at the selected site. The company expects to lodge its energy service contract application with the Department of Energy (DOE).


November 2022

KLEAN TO DEVELOP WASTE-TO-ENERGY PROJECT IN PHILIPPINES

Canadian green technologies company Klean Industries will conduct a detailed feasibility study for a project to design and build a waste plastic pyrolysis plant in the Philippines. The facility, which will have an annual capacity of 10,000 metric tonnes, will be jointly built with RGH Systems, a subsidiary of local renewables and infrastructure company REI Global.

The initial round of funding has been completed. The partners are now involved in the initial steps to advance the project, including securing a suitable site with the planning permissions and feedstock procurement. The duo anticipates the project being financed before the end of the first quarter of 2023. Construction is scheduled to begin next year and operations in the first quarter of 2024.


PHILIPPINES ENERGY DEPARTMENT SEEKS REVISED NORMS FOR FOREIGN INVESTMENTS

The Philippines' energy department requests for a revision to the foreign investment list to reflect the proposed liberalization of the renewable energy sector. The Department of Justice had previously removed a 40% cap for foreign investors in renewables projects.

Department of Energy (DOE) Secretary is readying a plea to the National Economic and Development Authority for the revision to make it clear that renewable energy will not be subject to the earlier norms. The DOE is seeing strong interest from both local and foreign investors in clean energy development, which is likely to increase with the easing of the equity curbs. The correction will pave the way for foreign-owned enterprises or international citizens to explore, develop and use the country's renewable resources such as wind, solar, biomass, ocean or tidal energy.


PHILIPPINES PLANS TO TENDER EXPRESSWAY PROJECT

The Philippines government is preparing to begin a bidding process for the Metro Cebu Expressway project. The country's Public Works and Highways Undersecretary for Planning and Public-Private Partnership (PPP) is readying a project report, which will be looked at by the National Economic Development Authority (NEDA).

The government will launch the tender offer for private sector participation. The 73.7 km toll road comprises of three segments. The first will connect Minglanilla, Talisay, Cebu City, Mandaue and Consolacion. The second will link the expressway to Danao City, while the last stretch will link Naga City and Minglanilla. Its construction will cost an estimated PHP 94 Bn (USD 1.7 Bn). Cebu-Cordova Link Expressway, a unit of Metro Pacific Toll ways, recently expressed its interest to construct and maintain the expressway.


PETROGREEN PARTNERS WITH COPENHAGEN ENERGY FOR PHILIPPINES OFFSHORE PROJECTS

Manila-based renewables energy producer Petro Green Energy Corporation (PGEC) is joining with Copenhagen Energy to build several offshore wind power projects. The agreements were signed for Buha wind Energy East Panay, Buha wind Energy Northern Mindoro and Buha wind Energy Northern Luzon. PGEC's parent company Petro Energy Resources Corporation (PERC) would set up three separate special purpose vehicles to oversee the development of these projects with a total potential capacity of about 4 GW.

Denmark is looking at ways to partner with the Philippines' government to remove barriers to commercial offshore wind development. Copenhagen Energy has an offshore wind pipeline of more than 28 GW in Denmark, Australia, Ireland, Italy and the Philippines.


December 2022

STONEPEAK'S ASIA DATA CENTER PLATFORM BUILDING PROJECT IN PHILIPPINES

Stonepeak-backed data center developer Digital Edge is developing a 10 MW data center in Manila city, which is scheduled to start commercial operations in March next year. The project — NARRA1 — is a joint venture with Philippines technology and real estate-focused family office Thread borne Group.

Digital Edge will operate the center under its own brand. Located in Binan Laguna, the data center will be close to the central business districts in Manila and comprises 2,200 cabinets. It will be an energy and water saving facility with a power usage effectiveness of less than 1.2. The metric is used to determine the energy efficiency of a data center.

Singapore-headquartered Digital Edge owns a portfolio of more than 210 MW of IT capacity, including the Philippines project.


ABOITIZ INFRA CAPITAL PARTNERS WITH KEPPEL FOR PHILIPPINES DESALINATION PLANT

Aboitiz Infra Capital (AIC), the infrastructure arm of Aboitiz Group, will collaborate with Singapore-based Keppel Infrastructure for a desalination plant project in the Philippines. The Metro Manila-based company has submitted an unsolicited proposal to supply the Metro Cebu Water District with 30 million litres per day of desalinated bulk water. It intends to use Keppel Infrastructure’s expertise in building and operating a desalination plant in the province, where raw saltwater will be treated using a reverse osmosis water treatment technology.


LAND BANK SIGNS PHP 2.6 BN LOAN FOR A HYDROPOWER PLANT IN MINDANAO

The Land Bank of the Philippines (Land Bank) has signed a PHP 2.6 Bn loan agreement with Cabanglasan Hydropower Corporation (CHC) to finance the construction of a 15 MW hydropower plant in the Bukidnon province of Mindanao. The loan has been approved under the bank’s Renewable Energy Program.

The hydropower facility will be located on the Pulangi River. Once the facility is operational in 2025, it will improve the sustainability and reliability of energy supply in 15 municipalities in the Bukidnon province.


PHILIPPINES TO FOCUS ON INFRA PPPS IN YEAR 2023

The Philippine government will focus on public-private partnerships (PPPs) for infrastructure projects in 2023. It will also facilitate the development of local PPP projects in priority sectors to prop up the economy and create jobs.

In its year-end report, the National Economic and Development Authority, the country’s top economic planning body, the Marcos Administration stated that it will undertake programmatic Investment Coordination Committee appraisal and programming of major national projects in 2023.

It will also finalize the Regional Development Plan, the Public Investment Program for 2023-2028, and the Three-year Rolling Infrastructure Plan for 2024-2026.

 

List of key transactions - Philippines Q4 2022



Source: YOG INFRA analysis, Public Information

 

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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.


For more information about us, our service offerings and team, please visit www.yoginfra.com Contact us at info@yoginfra.com


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