P4.7B solar power plant to rise in Marawi

MARAWI CITY (MindaNews / 18 Feb) – Cheap solar energy will be available for residents here by March 2015.

Marawi City officials and the United States-based Mendoza Solar Company broke the grounds Monday in Barangays Malimono and Matampay-Cormatan where the P4.7-billion photovoltaic plant will be constructed.

The solar plant will be the biggest in the Philippines, placing the country second only to Thailand, Asia’s top solar producer, officials claimed.

“This is a game changer for Marawi City. Solar energy will provide cheap energy to our residents,” Marawi City Mayor Fahad Salic said.

Salic and the Islamic City of Marawi entered a Public Private Partnership Agreement with the Lim Solar Philippines, subsidiary of Mendoza Solar Company, for the construction of the solar plant.

The deal will earn P50 million a year for the Marawi local government – 40 percent of the earnings will go to barangays Malimono and Matampay-Cormatan.

According to their website, Mendoza Solar Company is based in California and Nevada “providing renewable energy solutions for all types of property owners.”

Winston Lorenzana Mendoza, chair of the solar power company, said that for the project, his company managed to obtain a standby financing of $800 million and another $500 million from a consortium of US banks.

“We are providing Marawi City residents an alternative source of energy. This can be the ticket to other major investments in the future,” Mendoza said.

Salic and the local government provided the 30 hectares of land and another 50 hectares that will be transformed into the Marawi City Solar Photovoltaic Power Park in the rolling hills of Barangays Malimono and Matampay-Cormatan.

In return, Mendoza promised that the solar energy available for Marawi City will be at P3 per kilowatt hour.

The Power Sector Assets and Liabilities Management Corporation (PSALM Corp) supplies the electricity in Marawi City after the Lanao del Sur Electric Cooperative incurred more than P7 billion in debts.

Engr. David Tuali, a consultant who brokered the deal between Marawi and Mendoza Company, said cheap electricity rate is possible under the Feed-in Tariff (FIT) payments from the national government under the Renewable Energy Law.

Tuali said under the law, consumers in Marawi City will be exempted from paying the purchased power component – a reduction in the electricity rate from the present P6 per kilowatt hour to only P3 per kilowatt hour.

“The government will be the one paying Mendoza Company while guaranteeing that Marawi City government will get its share. Everyone wins in this deal,” Tuali said.

Energy Assistant Secretary Daniel Ariaso Jr. said Mendoza Company is required to implement 80 percent of the project eight months after the groundbreaking ceremony Tuesday morning.

“Otherwise the service contract the government signed with Mendoza will be terminated. They cannot go in business. That is how strict the renewable energy law is. We will come back by September this year to inspect the implementation,” Ariaso said.

Mendoza said he expect construction to start by April 1 a soon as the first batches of solar panels from Malaysia and Indonesia will arrive at the port of Cagayan de Oro.