Netherlands & S. Korean firm eyes $1B power projects in Philippines

Korea Water Resources Corp., the leading water resources and Power Company in South Korea, is looking to invest as much as $1 billion in equity for various water and power projects in the Philippines over the next three years.

Specifically, K-Water is considering the installation of floating solar power systems at the Angat Dam and the construction of the Kapangan hydropower project in Benguet, said K-Water representative in the Philippines, Jiheun (Peter) Yun.

According to Yun, the company is willing to invest as much as $60 million to install the "floating solar power system" in any of the dams in Luzon.

Once installed, it will be the first of its kind anywhere in the Philippines, the company claimed.

K-Water has already begun talks with potential partners including the Ayala group and conglomerate San Miguel Corporation.

K-Water explained in a separate statement that the floating solar power system involved the setting up of solar panels in a reservoir, which would allow it to generate higher power output and, at the same time, create an ideal environment for fish spawning since it constrains green algae.

Yun told reporters that the company would initially install a system that could generate 10 megawatts.

K-Water is still considering whether the system will be installed at the Angat Dam or in other dams, such as the San Roque (Pangasinan) facility, Casecnan (Nueva Vizcaya) or the Caliraya-Botocan-Kalayaan (CBK).

According to Yun, K-Water is set to conduct a feasibility study by early next year. This study is expected to be completed within six months. The actual construction of the power plant will take another six months.

"This is the first time (in the country) that the floating solar power system will be constructed within a water reservoir. In Europe and the US, similar projects … are being installed in oceans and/or rivers," Yun said.

It was only last year that K-Water started installing the system in a water reservoir. That same technology has been in use in Europe and the United States for the past decade.

Yun, meanwhile, assured the public that a power facility in water reservoirs would not pose hazards to the environment or to surrounding host communities, citing the company's experience in South Korea.

He stressed that the facility would not contaminate the water reservoir, such as the Angat Dam, which currently provides 97 percent of the water requirements of Metro Manila.

Since the initial project will have a 10-MW capacity, the company plans to sell the electricity to other private firms, Yun said.

As for its planned hydroelectric power project in Kapangan, Benguet, K-Water earlier announced that it would invest $200 million for a 65-MW facility.

Liquigaz expanding business in Philippines

Liquigaz Philippines Corporation., the local unit of SHV Gas of Netherlands, is planning to expand its business in the country by offering fuel products other than liquefied petroleum gas (LPG).

Liquigaz president and managing director Santanu Guha told reporters that although SHV Gas almost gave up its Philippine business a few years back, the management changed its direction and decided to stay put.

"We are looking at all the emerging countries, because as you are aware, Europe is going through a very bad phase. You have to invest somewhere else and Asia is the place which people around the world are seeing as an emerging (region). It is expected that the next 25 years will belong to Asia," Guha said.

"That's the reason our management has decided to stay here in Philippines and give it more time to focus on the deployment of products for brand build-up, not only in the LPG business but in other types of fuels as well," he added.

When asked if Liquigaz would participate in the local downstream oil retail sector once it decides to retail other types of fuel products, Guha said it was an option but nothing was definite.

Liquigaz is maintaining a bullish outlook on the Philippines despite an expected slower growth this year.

"Our results in 2011 have not been every good because of the fluctuation in gas prices as well as in foreign exchange—we're importing in dollars but selling in pesos. Those fluctuations were bad for us," Guha said.

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Philippines – Europe & Russian (FTA) Free trade deal eyed to boost

After a three-year lull, the Philippines and the European Commission are scheduled to restart exploratory discussions that could eventually lead to the signing of a free trade agreement between the country and the 27-member European Union.

Peter K.J. Berz, EC Deputy Head of Unit for Trade Relations with South Asia, Korea and the Association of Southeast Asian Nations, said in a briefing with a group of Southeast Asian journalists here that he was leading a delegation to the Philippines from the EC that would discuss trade and industry matters with the Department of Trade and Industry.

Possible measures to improve trade relations between the European bloc and the Philippines as well as increase investments by European companies in the Philippines are high on the agenda of the half-day meeting scheduled for December 12 in Makati City.

According to data from the EU, the European bloc has become the Philippines' largest single export market in the past five years, accounting for about 17 percent of total exports. Following the EU is Asean with a share of 17.2 percent followed by the United States (16.8 percent) and Japan (15.6 percent).

Philippine exports to the EU expanded by over 40 percent to 5.4 billion euros in 2010 from about 3.8 billion euros in 2009. Electronics top the list of exports, followed by transport equipment, garments and textiles and agricultural products.

Philippine imports from the EU, on the other hand, grew by more than 26 percent in 2010 to over 3.7 billion euros from 2.9 billion euros in 2009.

Total two-way trade totaled over 9.1 billion euros in 2010, making the EU the Philippines' fourth-largest trading partner, accounting for 13 percent of total trade. Traditionally, the Philippines has enjoyed a trade surplus with the EU, which in 2010 increased to over 1.6 billion euros.

Berz said that the Philippines, Vietnam, Thailand and Indonesia were the four members of the Asean that the EC—the executive arm of the EU—was considering exploring free trade relations with, as part of Europe's overall plan to expand its already significant presence in Asia.

The EU this year signed a free trade agreement with South Korea and it came into force in July. It was the first FTA to be entered into by the EU and an Asian country, and negotiations with Singapore and Malaysia are now in full swing to add to the list of trade deals between EU and fast-growing Asian nations.

The EC, which handles trade negotiations on behalf of the member-states of the EU, hopes to conclude the negotiations with Singapore by the middle of next year, to be followed by Malaysia at the end of 2012.

How soon the other four countries can sign similar trade agreements with Korea, Singapore and Malaysia will depend on the level of commitment and ambition of both countries, according to EU officials, considering that the new FTAs pushed by Europe cover more than just trade and industry to specifically include such concerns as sustainable development, environmental impact and even labor practices.

Laos, Cambodia and Brunei were not high on the priority list of countries with whom the EC wants to conduct trade negotiations with considering their small internal markets. Myanmar is also ranked low because of the fluid political and economic situation there.

Boosting Philippine-Russian Trade Relations

The growing trade relations between the Philippines and Russia have been boosted by the creation of the Russian-Philippine Business Council (RPBC) recently, reaffirming the two countries' commitment to strengthen economic and cultural ties.

The RPBC was formed after the Chamber of Commerce and Industry of the Russian Federation approved it through a Memorandum of Agreement (MoA) with the Philippine-Russian Business Assembly (PRBA), its counterpart in the Philippines.

Under the RPBC, the 68th Business Council created under the Chamber of Commerce of the Russian Federation, Filipino entrepreneurs will have more opportunities to do business with Russia, especially in tourism, transport, communications, food, telecommunications, energy, and power. The promotion of other business opportunities will be undertaken, giving priority to medium-sized enterprises.

The Philippines expects the stronger ties with Russia to widen the market for local products. Top exports to Russia from the Philippines include aircraft parts, desiccated coconut, carrageenan, lighters, personal care products, and banana chips.

It is also expected to boost Philippine exports of car parts, processed and frozen food items to Russia. This year, bilateral trade between the Philippines and Russia stands at over $713 million, and is expected to hit a record of over $1 billion by the end of 2011.

The creation of the RPBC is another fruitful result of the 35-year diplomatic relations between the Philippines and Russia. The two countries forged diplomatic relations on June 2, 1976. Over the years, bilateral ties have developed through cooperation in defense and security, trade and investment, energy, agriculture, education, culture, and tourism. To date, a total of 31 bilateral agreements have been signed.

Much optimism has been generated by the creation of the Russian-Philippine Business Council, as it is expected to provide impetus to more dynamic economic relations between the two countries. The alliance is expected to translate into more tourists, more trade, and more investments from Russia, as well as further open the Russian economy for more products from the Philippines.

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