Philippines grants tax benefits to 19-MW Tamugan

The Philippines’ Board of Investment has approved plans by developer Hedcor Tamugan Inc. to invest 2.8 billion pesos (US$59 million) to build the 19-MW Tamugan hydroelectric project in Davao del Sur.

The run-of-river project, to be built on the Panigan River on Mindanao, is to go on line in 2010. The Board of Investment granted Tamugan �pioneer status,� which confers tax benefits on renewable energy projects, including an income tax holiday and duty-free importation of capital equipment.

Hedcor Tamugan’s parent, Hedcor Inc., a unit of Aboitiz Equity Ventures, signed a power sale agreement March 7 with another Aboitiz unit, Davao Light &Power Co. In bidding to supply 400,000 MWh annually, beginning in 2009, Hedcor represented a consortium including Hedcor Tamugan and Hedcor Sibulan Inc., which is developing the two-plant 42.5-MW Sibulan project, to go on line in 2009 on the Sibulan and Baroring rivers.

In 2005, Aboitiz merged its hydropower subsidiaries, Hydro-Electric Development Corp. and Northern Mini Hydro Corp., into a single operation, Hedcor Inc., to manage its 19 hydropower plants totaling 113 MW. Hedcor owns the 3.5-MW Talomo hydroelectric project in Davao on Mindanao, the first plant to be privatized by the government, for US$1.37 million.

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