Coal-fired power plant wins tax perks

18 September 2006 — The Philippine government’s Board of Investments (BOI), the investment promotions arm of the Department of Trade and Industry, has approved a foreign group’s bid to build and operate a coal-fired power plant in Bataan province.

The BOI said it granted “pioneer incentives” to GNPower Ltd. Co. for its 600 MW coal power plant project, with total project cost of P43.903 billion (approximately $860 million).

To spur investment activity, the government has waived the traditional 60 percent Filipino, 40 percent foreign equity mix required for the entry of foreign interests in the power sector, and satisfied the conditions for pioneer status. In granting the incentives to GNPower, BOI said the company’s project falls under a segment of the 2006 Investments Priority Plan (IPP) that grants pioneer status to energy projects in excess of P1 billion ($20 million).

GNPower is a partnership between Power Partners Ltd. Co. and mutual fund manager PMR Holdings Corp. The 100 percent foreign-owned company is split between Nauruan and U.S. investors. The company plans to finance the project by raising P29.157 billion through equity, and the remaining P14.746 billion through the sale of debt.

GNPower expects the plant to be fully operational by December 2010 and will consist of two 300 MW power blocks using pulverized coal technology.