SEOUL, Nov. 1 (Korea Bizwire) – Korea Water Resources Corp. (K-Water) took the operational control of Angat Dam in the Philippines and began its operation on October 31. It is the first instance for a Korean firm to run an overseas dam.
Located 58 kilometers northeast of Metro Manila, the multi-purpose dam has a hydroelectric power generation capacity of 214 MW and satisfies 98 percent of tap water needs for the nation’s capital city.
K-Water participated in a bidding to acquire the dam in a way to advance into the profit-proven Filipino electric grid market in April 2010 and won the bidding by paying US$441 million. Since the bidding, K-Water underwent due-process to run and make commercial generation of the dam such as establishment of local SPC, assets count, performance assessment, related licensing and procurement of working capital.
Since the opening of the electricity grid market to foreign operators in 2002, the Philippines has become a home to several international power companies such as Japan’s Marubeni and Norway’s SN Power, as well as Korea Electric Power Corp.
K-Water plans to hand over an unknown amount of the stake of the project to San Miguel Corp. for the joint operation of the dam. From the transaction, K-Water will earn approximately 30 billion won (US$28.4 million) as premium and it is expected to raise the profitability of the dam management.
In addition, the company will be able to earn an average of 12 billion won ($11.3 million) or 15 percent of ROI for the next 50 years.
K-Water plans to successfully run the dam by employing Korea’s advanced water management technologies and manage the dam sustainably by regularly checking the safety issues of the decades-old dam. Meanwhile, as Korea’s state-owned enterprise, K-Water will engage in various corporate social responsibility activities for the development of neighboring communities.
Song Seok-joon, director of Construction Policy Bureau of the ministry, said, “The operation of Angat Dam is a meaningful milestone in that a Korean company has entered the market for high value-added build-own-operate projects. This project will initiate for Korean companies to join other water management projects in the Philippines and elsewhere.”
By John Choi (firstname.lastname@example.org)