Meralco Powergen Coal Projects · San Buenaventura Power Limited Co. (SBPL) 455MW (net) Supercritical Coal-Fired Power Plant in Mauban, Quezon 8 Transformer Area STG, Control Building,

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Meralco Powergen Coal Projects

Dan Neil

Executive Vice President and General Manager

MGEN

Confidential 1

Meralco and Meralco PowerGen

• Meralco PowerGen Corporation (MGen) is a wholly-owned subsidiary of the Manila Electric

Company (Meralco).

• Meralco is the largest electric distribution utility in the Philippines, covering the Greater

Manila region, 36 cities and 75 municipalities.

• 115 years in service.

• Serves over 6 million customers, 50% of the total electricity demand of the Philippines

• MGen is pursuing the development and construction of cost-competitive and reliable power

plants to ensure the provision of adequate, reliable and affordable power to customers in the

Meralco franchise area and other areas.

• Targeting a diversified power portfolio of up to 3,000 MW in the Philippines; focusing on

availability, reliability and price to the consumer.

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MGen Priority Projects

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Meralco Powergen

4

Atimonan One Energy, Inc. (A1E)2 x 600 MW net

Super-Critical Coal

Redondo Peninsula Energy, Inc (RPE)In partnership with Aboitiz / Taiwan

Cogeneration Corporation2 x 300 MW net

Cicuilating Fluidized Bed, Sub-Critical

San Buenaventura Power Ltd. Co. (SBPL)In partnership with EGCO1 x 455 MW net

Super-Critical Coal

Global Business Power Corporation (GBPC)749MW net

Sub-Critical Coal / Diesel

Pacific Light Power Pte Ltd.In partnership with Metro Pacific

Inverstment Corp.2 x 385.5 MW net

Combined Cycle Gas Turbine

Under Construction

49%***

Under Development Operating

51%*

50%**

22%

28%

*

MGen Projects

RPE SBPL A1E

TechnologySubcritical

Circulating Fluidized BedSupercritical

Pulverized CoalUltra-supercritical

Pulverized Coal

Capacity (MW, net) 600 455 1200

Capacity factor 80% 80% 80%

Commercial Operation Date 2021 Mid 2019 2022

Fuel Requirement (MTPA) 2.5 1.5 4

Potential Fuel Source Indonesia Indonesia Indonesia, Australia, US PRB

Coal Specification

Calorific Value (GAR, kcal/kg) 4,500-5780 4,300-5,000 4,500-5,800

Ash Content 6.9-18% 0.5-8% 1.3-11.7

Sulfur Content 1% 1% 0.07-1%

Fuel purchasing update To be managed by the Joint

Venture. Identification of preferred suppliers ongoing.

Managed by existing project operator; early discussion

ongoing

Being managed by MGen; working with coal consultant to identify preferred supplier

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MGen’s Coal Power Projects

6

Redondo Peninsula Energy, Inc.

San BuenaventuraPower Co. Ltd

Atimonan 1 Energy

SBPL Project Overview

7

ERC approved Power Supply Agreement

with MERALCO with modifications

accepted on May 30, 2015

Total Project Equity: Php 14.05 Bln

MGEN: Php 7.17 BlnNGBV: Php 6.88 Bln

Meralco PowerGen (MGen) - 51%

New Growth BV (100% owned by EGCo) – 49%

1 x 455MW (net) coal fired Supercritical Pulverized

Coal Boiler and Steam Turbine Generator in Mauban,

Quezon (the “Project”)

Total Project Cost

Project Company

Current Shareholders

EPC Contractor / Equipment

Off-take

Expected COD

Grid Study

Project Description

San Buenaventura Power Ltd. Co. (“SBPL”)

Php 56.2 Bln

Notice to Proceed to Daelim Industrial Co.

Ltd. and Mitsubishi Corporation issued on

December 08, 2015

Completed and reviewed by NGCP as of

December 17, 2013

Mid 2019

Total Project Equity

San Buenaventura Power Limited Co. (SBPL)455MW (net) Supercritical Coal-Fired Power Plant in Mauban, Quezon

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Transformer Area

STG, Control Building, Boiler and Pulverizer Area

• Construction of the power project is now on its 28th month and on schedule for commercial operations in mid-2019.

• Recent significant EPC Milestones are as follows:• Boiler structure has topped

out with the installation of the heavy girders

• Installation of all 5 transformers

• Stack structure reached full height of 155 meters

Project Overview - Atimonan

Confidential 9

Project CompanyAtimonan One Energy, Inc. (“A1E”)

Project DescriptionGreenfield coal project, 2x600MW (net) using Ultra-Super Criticaltechnology

Current Shareholders100% MGEN owned at present; 49% sell-down to investor ongoing

Total Project Cost~ PhP143.3 Billion

Off takeFully contracted with Meralco; PSA for ERC approval

EPC ContractorPreferred contractor identified, grant of contract awaiting final ERC

approval

ECCECC issued in October 2015

TL ROWRequires 25km alignment to New Pagbilaosubstation,

InterconnectionGIS and Facility Study approved by NGCP; Connection Agreement executed by NGCP in Jan 2017

Expected CODU1 - 2022

Opportunity for MGenIndependent development of project targeted to be the most efficient generation facility in the Philippines

Atimonan One Energy, Inc. (A1E)2x600 MW Ultra Supercritical Coal-Fired Power Plant in Atimonan, Quezon

▪ Environmental Compliance Certificate (ECC) obtained in October 2015

▪ In April 2016, A1E signed a PSA with Meralco for the full output of the plant. The PSA

is awaiting ERC approval.

▪ Connection Agreement with NGCP approved by the ERC in February 2017

▪ Preferred EPC contractor identified, Notice to Proceed awaiting final regulatory

approvals.

▪ Mandate Letter for up to Php107.5B from a group of 7 local banks signed.

▪ Site preparation works are targeted to start in Q3 2018. Expected completion of

Unit 1 is in 2022

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Atimonan One Energy, Inc. (A1E)2x600 MW Ultra Supercritical Coal-Fired Power Plant in Atimonan, Quezon

▪ Turnover of resettlement

housing for the affected

families was completed in 2017

▪ Construction of a 1.6-km

Access Road completed

earlier this year.

▪ Regular CSR activities in place

for the benefit and

development of the affected

communities and the LGUs,

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Redondo Peninsula Energy, Inc. (RP Energy)2x300 MW CFB Coal-Fired Power Plant in Subic, Zambales

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Total Project Cost

Project Company

Shareholders

EPC Contractor / Equipment

Off-take

Expected COD

Transmission Line

Project Description

Redondo Peninsula Energy, Inc.

(“RPE”)

2X300 MW (Net), Circulating Fluidized Bed

Coal Fired Power Project, located in Subic Bay

Freeport Zone, Philippines (the “Project”)

Meralco PowerGen 50%

Aboitiz Power Corp. 25%

Taiwan Cogeneration Corp. Philippines

Branch Inc. – 25%

~PhP42 Billion For Phase 1:

PSA with Meralco DU (225MW) and

Aboitiz Energy Solutions Inc. (75MW)

Offshore Contractor – Doosan Heavy Industries

Construction Period

39 months for Phase 1

from Notice to Proceed

Q4 2021

U1 in place

U2 under final development

Board of Investments

Certificate of Registration awarded on June 1, 2016

Status – Non Pioneer

The project has completed all major development activities and is waiting for the approval of its revenue agreement from the regulator before it issues a notice to proceed.

The Future of Coal

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Why MGen is developing coal projects

• MGen’s pursuit of coal projects is aligned with why MGen was

established:

• Reliable low cost generation:

• Coal is the reliable and cheap baseload supply to provide security

of supply to Meralco customers.

• Competitiveness in Power Rates, Reliability & Efficiency:

• Highest efficiency from choice of larger-sized plants and of super-

critical plant design; hence, protection against fuel cost.

• Using only proven high-efficiency designs, securing project cost

from credible EPC contractors and reliable OEM suppliers

Confidential 14

A competitive generation sector in a price-sensitive

buyers market drives the building of coal plants

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Pre – EPIRA

• Generally, a Sellers’ Market

• State monopoly under NAPOCOR

• Imperative to reduce oil; replace with indigenous and renewable energy

• Government market or off-take guaranties to incentivize investors in power

Under EPIRA

• Generally, a transformation to Buyers’ Market

• Empowering buyers with competition and choice

• Radical structural reforms:

• Exit of government in generation and transmission

• open, competitive and deregulated generation sector,

• creation of WESM,

• implementation of RCOA.

• Competition for PSAs and in the WESM spawns new builds

EPIRA: Republic Act 9136 – Electric Power Industry Reform Act of 2001

New Builds will replace aging plants and meet growth60% are older than 15 years

Confidential 16

≤ 5 years

25%

>5 and ≤ 10 years

4%

>10 and ≤ 15 years

12%>15 and ≤ 20 years

26%

>20 and ≤ 25 years

11%

>25 years

22%

21,210 MWTotal Capacity

Going Forward

• MGEN remains committed to supply diversity for the future

– LNG remains of interest, when the market mechanisms are in place

to give a return on investment

– Growth in renewables, particularly wind and solar, will continue

where the projects are competitive

• But coal will be a cornerstone of the Philippine electricity

market for many years to come

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