February 9, 2023

CITY OF TABUK, Kalinga – The provincial government is venturing into a public-private partnership (PPP) on hydropower development aimed at reducing the electricity rate in the province.

The provincial government, DPJ Engineers and Consultants, and Tabuk Hydro Energy Corporation (THEC) approved a joint venture agreement for the implementation of the Upper Tabuk Hydropower Project (UTHPP).

The agreement was signed by Gov. James Edduba for the province and Daniel Peckley Jr. for DPJ and THEC Corporation in the presence of Vice Gov. Jocel Baac and members of the sangguniang panlalawigan.

The SP in Resolution 2022-333 authorized Edduba in behalf of the provincial government to invest in renewable energy particularly the UTHPP project at Barangay Dupag.

The MOU provides Kalinga PLGU shall own 20 percent of the project by providing P158.40 million and will receive 20 percent of the net income of the project projected at an average of P30.9M per annum for the first 25 years of operation.

It shall facilitate the issuance of remaining permits and clearances for the implementation and, eventually the operation of the project; be responsible for securing right-of-way for the access road and bridge and transmission line; participate in the negotiations with Kalinga Electric Cooperative and other possible off-takers for the renewable energy that shall be generated; and assist in providing security for the implementation and operation of the project.

Further, the PLGU shall provide inputs in the efficient and proper operation of the project and abide with the quality control process and procedures in the implementation and operation of the project.

It shall have the right to examine the financial statements, cash outlaws and inflows, and the management and operational processes of the project; have voting rights equivalent to 20 percent weighted-rate in the selection of plant manager; and in setting up the operational, management and financial decisions, policies and procedures for the project.

On the other hand, DPJ and THEC shall own 80 of the project and be primarily responsible for the implementation of the project, providing the financing and development activities as well as the construction of the main components of the project.

They shall be responsible for the management and operation of the project, receive 80 percent of the net income and have voting rights equivalent to 80 percent.

The main components of the project are the construction of a concrete gravity dam, penstock intake tower, powerhouse, sediment flushing tunnel, 69 kilovolts sub-transmission line, access road and a bridge. The normal operating height (head) for power generation will be around 35.4m while the design flow is around 60m/s.

With a total estimated cost of P2.64 billion, the project will have a nominal generating capacity of 15 megawatts.

It is conservatively projected to generate around 52.82 gigawatt hours of electricity annually. Around 60 percent of this annual energy generation or 31.69GWh of electricity will be produced at peak hours a day.

At a forum rate of P6.25 per kilowatt hour and at 30:70 equity-to-loan ratio, the project internal rate of return shall be around 9.41 percent and the equity IRR of 11 percent.

The term of the agreement shall be 25 years, renewable for another 25 years and subject to periodic review every five years.

Any violation of the provisions stipulated shall cause the suspension, termination or revocation of the agreement. – Peter Balocnit