MANILA ― The state-run Korea Electric Power Corp. is developing a project to build a 300-megawatt coal-fueled power plant with Hanjin Heavy Industries and Construction, Korea’s oldest shipbuilder, in the Philippines, KEPCO officials said.

“The Hanjin Group affiliate will make an equity investment in the project based on the build-operate-own contract, while it will be responsible for the plant construction,” said Hwang Kyu-byeng, president and CEO of KEPCO Philippines.

Industry sources expect that Hanjin Heavy will take around a 10 percent stake in the project.

“To launch its third power plant project in the Philippines within a year, KEPCO is looking for the best site for the upcoming power plant in Battan, central Luzon region, the Philippines,” Hwang added.

Hanjin Heavy, which has run a shipyard in the Subic Special Economic and Freeport Zone in the Philippines since 2006, proposed the project in an effort to secure a stable electricity supply for its business amid rising uncertainties in power supply in the Philippines.

With the power market opening, it is critical for big power spenders like Hanjin Heavy to find a provider, local or foreign, to supply electricity in a sustainable manner at a competitive price for their business success.

“KEPCO, which has built its reputation as a creditable power supplier in the Philippines, is appealing to those Korean manufacturers in the Philippines,” Hwang said.

As of 2013, KEPCO runs two power plants ― a 1,200-megawatt gas-fired combined cycle power plant in Ilian, Batangas, and a 200-megawatt coal-fueled power plant in Naga, Cebu.

“KEPCO is ranked fourth among the Philippines’ independent power providers, taking about 10 percent of the total power generation capacity,” Hwang said.

Besides Hanjin Heavy, the KEPCO official said the company was in discussions with Samsung Group’s semiconductor site in the Clark Special Economic Zone, which is also located in the Central Luzon region, for a power supply contract after the Bataan power plant is completed.

“It will be a win-win partnership in that KEPCO is able to secure long-term contracts, while big Korean power spenders in the Philippines secure a stable power supply channel,” Hwang said.

KEPCO expects that business experiences in the Philippines where it has already adopted the merchant electricity market would be helpful in expanding its overseas businesses.

For future growth, the utility giant set the goal of expanding its overseas sales to 20 percent of total sales by 2020. As of 2012, the company runs 39 overseas projects in 22 countries and its ratio of overseas sales to the total stood at 5.7 percent.

By Seo Jee-yeon, Korea Herald correspondent
(jyseo@heraldcorp.com)