KEPCO Strengthens Its
Presence in Philippines
Launches its third power plant project in the Southeast Asian country

Korea Electric Power Corp. (KEPCO) has begun to construct a 200-megawatt coal-fired power plant in the Philippine region of Cebu. The project is the third that KEPCO is undertaking in the Philippines following 650-megawatt Malaya and 1,200-megawatt Ilijan power plant projects.
A groundbreaking ceremony for the planned base load power plant in Cebu was held in Cebu on December 16 with 600 Korean and Philippine people, including KEPCO Chairman-CEO Han Joon-ho, Minister of Commerce, Industry and Energy Lee Hee-beom, Philippine Energy Minister Raphael P.M. Lotilla, participating.
The 200-megawatt (100 megawatt x two units) circulating fluidized bed combustion power plant is to be completed by the first half of 2009 at a cost of about $330 million. KEPCO has a 60 percent stake in KEPCO Cebu Corp. a joint venture with Singaporean-owned Salcon Power Corp. The proposed plant will source coal from the Philippines or from Indonesia. Electricity from the plant will be sold to local distribution firms, large-scale clients and power trade exchange WESM.
On the same day, KEPCO signed a memorandum of understanding to acquire a 40 percent interest in Naga Power Plant, owned by Salcon Power Corp. The Korean power company will spend some 57 billion won to acquire its take and participate in the operation of the Naga Power Plant with a capacity of 200,000 kW.
Earlier, KEPCO struck an MOU with the Philippine government to raise the capacity of the Ilijan Power Plant from the current 1.25 kW to 1.85 kW. The power plant is located on the Luzon Island, the largest one in the Philippines. The Ilijan project is being constructed under a BOT (Build, Operate, Transfer) agreement for 23 years from March 1999, including three years of construction. It turns out to be a high value added undertaking by KEPCO with a 20-year-return on profits and a government guarantee.
In 1994 KEPCO made its debut in the global power generation sector by undertaking the Malaya project aimed at raising its capacity from 430,000 kW to 650,000 kW. The thermal power plant, under operation by KEPCO, has shown a better performance to date following the project.
KEPCO officials said if and when KEPCO's investments go as planned KEPCO's power generation capacity in the Philippines will increase from the current 1.85 million kW to 2.85 million kW in between 2008 and 2009. Its market share in the Southeast Asian country will likely rise from 12.3 percent to 18.9 percent, trailing Myrant which has a 20 percent share as the largest foreign-owned independent power producer.
KEPCO strives to become the biggest IPP in the Philippines with a more than 20 percent market share by participating in bidding for disposing of power plants owned by the state-run Philippine power company, NPC, they said.
MOCIE Minister Lee said during his speech at the groundbreaking ceremony in Cebu, "KEPCO has actively expanded its presence in the Philippine power generation market, thus fortifying cooperation between Korea and the Philippines in the energy sector."KEPCO CEO Han said in a meeting with reporters following the ceremony his company has been adopting differentiating strategies designed to meet each country's unique conditions to repeat its success story in the Philippines. "KEPCO's efforts to proactively develop the niche market have paid off,"he said.
The Korean power company proposed the Cebu project to the Philippine government two years ago, citing the fact that the electricity grid in Cebu and its neighboring islets are facing severe electricity shortfalls. Cebu is one of the tourist destinations favored by Korean honeymooners.
CEO Han said his company would collaborate with Korean public companies and private firms in a bid to make a foray into each country's power market.
A case in point in KEPCO's joint efforts to advance into foreign markets is a project in Nigeria in which Korean National Oil Company participate in a gas field exploration in return for KEPCO's construction of power plants in Nigeria and building up power transfer and distribution grids. "Capitalizing on not only the brand power of KEPCO but also Korea's national standing may have synergetic effects,"he said.
Han said KEPCO aims to grow into a global powerhouse with an electricity capacity of 1 million kW overseas by 2010 through its joint advances to foreign countries with other Korean companies. nw

Dignitaries celebrate the launch of the 200-megawatt thermal power plant project under the partnership between KEPCO and Salcon Power Corp. in Cebu, the Philippines.