PRE-FEASIBILITY STUDY

(Executive Summary)

MASLOG HYDRO POWER PROJECT

Carayacay, Maslog, Eastern Samar

March 2014

Presented by:

IRAYA ENERGY CORPORATION

L29 Joy Nostalg Center, 17 ADB Ave, Ortigas Center

Pasig City, MM Phils. 1600

EXECUTIVE SUMMARY

0-1. TECHNICAL SUMMARY

Maslog Hydroelectric Power Plant (MHEPP) is designed as a 10.5 megawatt run of river hydroelectric power plant. With a 15-meter dam it can generate of 45.3 gigawatts.

With a 40-meter dam, it can be a 20 megawatt plant with storage that can serve as a base load and peaking plant at 90.2 gigawatts.

Located in SitioTaytay, Barangay Carayacay in the municipality of Maslog, Eastern Samar, the diversion site is at latitude 120736.779 longitude 1250931.233. The natural head is 28.7 meters. The site drains from a virgin forest watershed area of 238 square kilometers with a type II rainfall (NO Dry Season). With 15 meters dam, the discharge is 29.5 cubic mtrs/sec(CMS) at 24.8 exceedance. With a 40-meter dam the discharge is 34.82 at 20% exceedance.

The geology at the damsite features basalt and andesite volcanic flows from riverbed to dam crest associated with dacites and pyrolclastics. A solid foundation for a dam.

Technical Summary Scheme A

Scheme B

10.5 mWts 20.00 mWts Height of Diversion Dam (up to ogee ) 15 40 m W.S. El Diversion Dam @ogee 121 146 m Drainage area at Diversion Dam 238 238 sq. km Design Flood (200 yrs return) 1782 1782 cms Dam crest length 80 150 m Spillway width 30X9 30X9 m Size of tunnel 3.2 3.4 m inside dia Length of Headrace Tunnel 1,920 1,920 m Size of Surge Tank 18 28 m inside dia Top of Surge Tank Elevation 129 153 m Ground Elevation at Surge Tank 126 150 m Height of Surge Tank above ground 3 3 m Size of Penstock 3 3 m inside dia Length of Penstock 303 308.2 m Tailrace Channel 10 10 m Tailwater Elevation 72 72 m Rated Discharge 29.5 cms @ 24.8 exc 34.82 cms @ 20% exc cms Net Head 40.9 65.83 m Powerplant Capacity 10,500.00 20,000.73 KW Energy Generation 49,300,000.00 90,298,080.00 Plant Load Factor 53.50% 51.54%

0-2. FINANCIAL SUMMARY

At 10.5 mWts, MHEPP will generate an Annual Gross Revenue of Php 290.8 M. The Opex is at Php 9.7 M with an annual Debt Service at Php 148 M (10 yrs @ 8%). The Net Income is Php 132.9 M (Renewable Energy enjoys a 7-year Income Tax Holiday). Based on ongoing hydro projects at current costs, the total Capex is Php 1.4 B (USD $ 3 M/mWt). At 70/30 DE, 10-year tenure @ 8% the Levered IRR is 32.58%.

At 20 mWts, MHEPP will generate an Annual Gross Revenue of Php 532.7 M. The Opex is at Php 9.7 M with an annual Debt Service at Php 300.6 M (10 yrs @ 8%). The Net Income is Php 232.3 M (Renewable Energy enjoys a 7-year Income Tax Holiday). The total Capex is Php 2.8 B (USD $ 3.2 M/mWt). The Levered IRR is 27.90%.

FINANCIAL SUMMARY Scheme A Scheme B 10.5 mWts 20 mWts Total Capex 1,419,949,044.85 2,881,656,200.95 Leverage (70/30 DE) 993,964,331.40 2,017,159,340.67 Equity 425,984,713.46 864,496,860.29 GrossAnnual Revenue @Feed In Tariff = Php 5.90/kwh 290,870,000.00 532,758,672.00 Opex 9,790,200.00 9,790,200.00 Debt Service @ 8% @ 10 yrs 148,129,996.09 300,616,225.16

Net Income 132,949,803.91 222,352,246.84

Generation Cost per kWhr 1.64 1.63 Feed In Tariff Rate 5.90 5.90 Potential Bilateral Tariff Rate 6.20 6.20 Levered IRR w/ IDC; 10 yrs repayment,30 yrs life) 32.58% 27.90% *** 7 Year Income Tax Holiday/10% Tax after 7 years/NO Vat

***please refer to attached full financial model

0-3. CAPEX

The Capex was estimated/established using data from ongoing and recently-commissioned projects and materials and labor costs from late 2013. The design fruited from hydrological rainfall and gaging data and analysis, actual geodetic and geologic surveys.

CAPEX 10.5 mWts 20 mWts ROW ACQUISITION 20,000.00 20,000.00 Road Access 75,000.00 75,000.00 Dam 3,400,000.00 24,630,000.00 Intake 125,000.00 125,000.00 Diversion & Temporary Works 1,050,000.00 2,100,000.00 Stilling Basin 350,000.00 350,000.00 Headrace (Tunnel) 8,966,292.13 9,820,224.72 Surge Tank 350,000.00 350,000.00 Penstock 445,449.67 445,449.67 Powerhouse 750,000.00 750,000.00 Electro-mechanical 5,250,000.00 10,000,000.00 Associated Transmission Line 2,123,595.51 2,123,595.51

Total Direct Cost 22,905,337.31 50,789,269.90 Engineering & Administration (7.5%) 1,717,900.30 3,809,195.24 Contingency (10%) 2,290,533.73 10,157,853.98

Total Indirect Cost 4,008,434.03 13,967,049.22 Total Project Cost (USD$) $26,913,771.34 $64,756,319.12 Total Project Cost (Php) 1,197,662,824.72 2,881,656,200.95 Cost per Megawatt $2,563,216.32 $3,237,815.96 Interest During Construction 222,286,220.13 227,191,847.18 Total Investment Cost (Php)= Cost per Mega w/IDC (USD)

1,419,949,044.85 3,038,949.26 2,881,656,200.95

0-4. HYDROLOGY

(Engr. Isabelo Abellon and Engr. Silvano Lambino Hydrologists)

Iraya Energy commissioned two separate hydrology studies by Engr. Silvino Lambino (formerly with Hedcor, Aboitiz) in 2010 and by Engr. Isabelo Abellon (NWRB) in 2013. Both studies yielded similar results. Recently, Iraya engaged the services of Engineering Development Corporation of the Philippines (EDCOP) to review and validate the said studies resulting in the recommended design and plant sizing.

The studies and validations focused on the available streamflow of the Dolores river in the area of the town of Maslog that could generate a desired optimum hydroelectric power capacity. One of the vital information needed for this endeavour is the availability of water at various exceedance probabilities specifically at 30 (storage type) and 50 (runoff-river type) percent of the time for hydro power development. This information can be obtained by conducting a flow duration or probability analysis from available historical daily streamflow records of nearby gaged river/s; in this case the Jicontol River streamflow records and rainfall data of Borongan, Eastern Samar and Catbalogan, Western Samar.

METEOROLOGIC SETTING

The climate of the project area is Type II climate type under the Modified Coronas climate type classification of the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA). This type of climate has no dry season with a very pronounced maximum rainy period from November to February. There is no single dry month, where the minimum rainfall occurs during the period from March to May.

While the immediate project site has no available rainfall records that could be used to determine the mean and monthly and annual rainfall, there are two (2) rainfall stations near the project area; namely the Borongan and Catbalogan rainfall stations that are operated by PAGASA. The Borongan Station is located about 60 kilometers south-east of the project site while Catbalogan Station is about 45 kilometers south-west of the project area. It is however observed and from verbal accounts of residents that farther north-east of the island province has more rainfall volume and frequency than the south where Borongan is. Maslog faces the monsoon-prone pacific front.

The monthly and annual rainfall values including the number of rainy days each month for the 35 years of record of Catbalogan and Borongan PAGASA rainfall stations is shown in Table 1.

Table 1 Monthly and annual rainfall values in millimeters (mm) of Catbalogan and Borongan rainfall stations

Month

Catbalogan Station, Catbalogan, Western Samar

Borongan Station

Borongan, Eastern Samar

Rainfall (mm)

Rainy days Rainfall (mm) Rainy days

January 225.30 17 625.30 25

February 144.80 16 414.10 22

March 129.80 14 306.90 21

April 102.60 14 256.10 21

May 170.10 15 296.90 18

June 200.00 17 232.00 18

July 243.70 18 198.80 17

August 224.90 17 182.00 15

September 263.00 19 204.50 16

October 301.50 21 312.70 20

November 321.40 22 555.40 23

December 309.60 22 663.30 27

TOTAL 2,633.70 212 4,248.00 243

The rainfall data of Borongan and Catbalogan were transposed using the Reciprocal-Distance Method of interpolation to the ungaged site at the project site. The result is shown in Table 2.

Table 2 Transposed rainfall data in millimeters (mm) at the site at Sitio Cabuwanan, Barangay Hinolaso, Dolores, Eastern Samar

Month

Rainfall (mm)

January

454.30

February

101.90

March

203.30

April

166.40

May

222.30

June

212.40

July

223.30

August

194.20

September

237.10

October

304.50

November

417.70

December

456.0

Annual

3,293.4

DEPENDABLE FLOW/FLOW DURATION ANALYSIS

Dolores River is one of the major rivers in the province of Eastern Samar. The headwaters of the river emanates from the high mountains several kilometers upstream of Sitio Cabuwanan, Barangay Hinolaso, Municipality of Maslog, Eastern Samar. From the headwaters, the river travels in easterly direction and changes its direction to south-easterly direction upon reaching Brgy. Hinolaso, Dolores before finally discharging to the Pacific Ocean.

The Dolores River Basin has only one (1) monitoring station. The gaging station was established in one of the tributaries of Dolores, the Jicontol River. The station is located at Brgy. Hinolaso upstream of the Municipality of Dolores. Reckoned at the monitoring station the river has a drainage area of about 95 square kilometers (sq. km).

The location of the proposed hydro electric power project has no historical streamflow records that can be used for flow duration analysis. As such, the streamflow data of the nearby gaging station (Jicontol River) on the same river basin was used for the analysis. As mentioned earlier the proposed Hydro Electric Plant will utilize the flow of Dolores River to generate electric energy. The proposed dam site is located several kilometers upstream of the gaging station. The drainage area of the river reckoned from the proposed project site is about 238 sq. km. of lush forest and mature timber. Over 30 years ago, a total log ban was declared in the island of Samar. Vegetation retains rainwater in its root system that drains gradually into streams and rivers even on dry days. The underbrush is wet year-round unlike deforested areas in northern Luzon.

The historical daily flows of the gaging station with period of records from 1959-1975 (Appendix 1) were subjected to a Flow Duration Analysis (Unbiased) to determine the various exceedance probabilities at different discharges specifically at 25 or 30, 50 and 80 percent of the time the flow is equalled or exceeded . The result of the analysis is summarized in Table 3. Details of the flow duration analysis are attached as Appendix 2 of this report. The resulting value was transposed to the proposed project site of IRAYA ENERGY CORPORATION using the Basin-Factor method. The result is displayed in Table 4. Likewise, the mean monthly and annual flow for the period of records of the gaging station were also determined to have a comparison on discharge values of mean annual to the flow duration analysis. The mean monthly flow of the gaging station about 10.196 cms is approximately available 30 percent of the time The summary of mean monthly and annual flow of Jicontol gaging station and at the dam site at Sitio Cabuwanan,Brgy. Hinolaso, Dolores, Eastern Samar is shown in Table 5. The proposed project will not adversely affect any water user located downstream since the waters will be returned back to the river after it is harnessed to generate electricity.

Table 3 Summary of discharge in cubic meters per second (cms,) with different exceedance probabilities for the period of records from 1959-1975 of Jicontol River at Sitio Cabuwanan, Brgy. Hinolaso, Dolores, Eastern Samar, Drainage Area (DA) = 95 square kilometers (sq. km)

Year

Exceedance Probability (per cent of time,%)

25 30 50 80

1959 7.09 6.200 3.700 2.650

1960 8.70 7.900 5.300 3.150

1961 5.44 4.670 3.020 1.750

1962 7.90 7.210 5.795 3.935

1963 10.04 8.500 6.175 4.660

1964 9.30 8.500 4.600 2.750

1965 10.10 9.300 6.900 2.950

1966 11.25 10.590 9.100 7.125

1967 42.55 39.400 9.320 4.230

1968 10.10 9.300 2.750 1.690

1969 11.96 9.600 4.850 1.870

1970 14.82 13.065 8.100 4.660

1972 9.30 8.260 3.315 1.055

1973 10.56 6.880 1.080 1.025

1974 8.03 6.075 2.350 1.015

1975 8.14 7.685 1.085 1.005

Total 85235 163.135 77.44 45.52

Mean 11.60 10.196 4.84 2.845

Table 4 Summary of discharge in cubic meters per second (cms,) with different exceedance probabilities at the proposed dam site located upstream of Barangay Hinolaso, in Bgy. Carayacay, Maslog, Eastern Samar, Drainage Area (DA) = 238 square kilometers (sq. km).

Year

Exceedance Probability (per cent of time,%)

25 30 50 80

1959 17.80 15.580 9.287 6.650

1960 21.84 19.830 13.300 7.900

1961 13.55 11.720 7.580 4.400

1962 19.93 18.200 14.550 9.700

1963 25.45 21.300 15.500 11.700

1964 23.34 21.300 11.550 6.900

1965 25.35 23.300 17.320 7.400

1966 28.24 26.580 22.840 17.88

1967 106.80 98.890 23.400 10.620

1968 25.35 23.30 6.900 4.240

1969 29.92 24.100 12.170 4.700

1970 37.20 32.800 20.300 11.700

1972 23.33 20.700 8.300 2.650

1973 26.50 17.300 2.710 2.570

1974 20.16 15.250 5.900 2.550

1975 20.46 19.300 2.720 2.520

Total 465.12 409.43 194.347 114.08

Mean 29.07 25.600 12.15 7.130

Table 5 Mean monthly and Annual flow in cubic meters per second (cms) of Jicontol River (DA = 95 sq. km.) at Brgy. Hinolaso, Dolores, Eastern Samar and at dam site at Brgy. Carayacay, Maslog, Eastern Samar (DA = 238 sq. km.)

Month Discharge, cm

Jicontol River, DA = 95 sq. km.

Dam site, DA= 238 sq. km.

January 17.698 44.420

February 8.570 21.510

March 8.075 20.270

April 3.765 9.450

May 5.300 13.303

June 5.750 14.432

July 4.605 11.560

August 3.110 7.810

September 3.200 8.000

October 7.420 18.620

November 18.060 45.300

December 28.860 72.440

Total 114.413

287.111

Mean 9.53 (37% of the time)

23.93 (38 % of the time)

INTERPRETATION AND SUMMARY OF RESULTS

The result of the flow duration analysis of daily streamflow records of Jicontol River at Sitio Cabuwanan, Brgy. Hinolaso, Dolores Eastern Samar (DA=95 sq. km.) yielded discharge values of 11.60 cms,10.196 cms, 4.84 cms and 2.845 cms for 25, 30, 50 and 80 percent of the time, respectively. The gaged river is located within the basin of Dolores River and downstream

1

10

100

1000

0 20 40 60 80 100

FLOW DURATION CURVE OF DOLORES RIVER

Carayacay, Maslog, Eastern Samar

D

isch

arg

e (c

ms)

Drainage Area = 238.0 sq. kms.

of the proposed hydro electric project. As mentioned earlier, the project will tap the waters of Dolores River, one of the major rivers that drains in the Municipality of Dolores. The result of the flow duration analysis of Jicontol River was transposed to the project using the Basin-Factor approach and yielded the following discharge values and corresponding exceedance probabilities.

25% = 29.07 cms.

30% = 25.60 cms

50% = 12.150 cms

80% = 7.130 cms

0-5. GEODETIC SURVEY, MAPPING & RIVER PROFILE

(Engr. Joseph Basilio Chief Geodetic Engineer, H.O. Noveloso Surveying)

**Detailed Geodetic Surveys available upon request

0-6. ENGINEERING GEOLOGIC SURVEY AND ANALYSIS

(Engr. Leandro Agudo Geologist, EDCOP)

INTRODUCTION The proposed Maslog Mini Hydroelectric Project is located in Bgy. Carayacay, Maslog, Eastern Samar, 36 air kilometers west-northwest of Dolores, Eastern Samar. Access to the site is by a farm to market road or boat from Dolores to Maslog and therefrom by boat to the damsite past Bgy. Carayacay. The dam would be a concrete overflow dam 15.0 or 40.0 meters high. It will be provided by a 1.9 kilometer powerway with the headrace that leads to a surge tank and / or forebay and a penstock that connects to the powerhouse and discharge water via the tailrace channel to the river. The fieldwork and foregoing discussion will be focused on this selected scheme. FIELDWORK The project has been visited on several occasions on a reconnaissance level. Recently, on April 21, 2014 a geological fieldwork was conducted at the project site and adjoining areas using a miners compass and GPS equipment. Access to the site from Maslog is by a boat ride and by foot where possible. However, there is a network of old logging roads that can be cleared and paved to access the project site. The field activity included rocktyping, delineation of formational boundaries, joint measurements on outcrops along river banks, in creeks and slopes. Wet areas and springs, sinkholes, slide areas and other significant geological features noted were recorded and indicated on the geologic map. GEOLOGY For an appreciation of the geology of Dolores River Basin, semi-detailed surface geological mapping was carried out from the mouth of Dolores River going upstream that extended 2.0 kilometers upstream of the selected powerhouse. REGIONAL GEOLOGY The Visayas Islands are products of vulcanism and sedimentary processes during the Cretaceous to the Tertiary period. They were formed by organic processes together with regional tectonic movements that resulted in the configuration of the islands.

The oldest rocks in the region are cretaceous sediments and volcanics that were strongly folded, metamorphosed and intruded by ultramatic rocks. These rocks include spilites, chert, sandstone, shale, limestone and anedesite, which are found in central Cebu, northern Bohol and central and southern Samar.

There was much vulcanism in the Tertiary period and the most widespread rocks are andesite and basalt flows associated with dacites and pyroclastics. Marine sedimentation took place with vulcanism and the sediments include sandstone, limestone, shale, tuffs, conglomerate and coal. Intrusive bodies predominantly diorite and quartz diorite occurred at various times.

Recent alluvial, lacustrine, beach and residual soils comprise the bulk of quaternary deposits. Deposition of these materials and recent vulcanism are active processes undergoing today.

There are five (5) structural features in the region:

PhilippineRift Zone Negros Trench Philippine Trench Visayas Sea Basin Iloilo Basin

The Philippine Rift Zone, the most prominent one, is a northwest trending strike slip fault passing the island of Leyte extending to the Lingayen Gulf and running southward to Mindanao main land. It is a wide zone of unilateral shearing and fragmentation defined by the extensive development of gouge and breccias. There were two sets of major fault structures developed as a consequence of this major rifting, the northeast-trend faults and the east-west fractures at an angle and with proximity to the main rift zone. Most of these faults intersect the older Eocene-Pliocene sedimentary and volcanic rocks.

Of particular interest in this study is the Geology of Samar and Leyte Islands shown in Figure 4.1. Although no major fault passes through Samar Island unlike Leyte, several occurrences of localized fault are evident especially in the northern portion of the island. The occurrence of seismic events within the proximity of the project site must be taken into consideration in the design of the structures.

LOCAL GEOLOGY

Powerhouse The site of powerhouse at the right bank of Dolores River was mapped. Only windows of hard but slightly weathered basalt and agglomerate rocks were noted that rise 1.0 meter to 2.0 meters above river level. Flow layers in the rocks are horizontal to slightly inclined. This feature is also exemplified in rock ledges observed along the main river channel and its tributaries.

Headrace and Penstock The area upslope to the ridge along the headrace and penstock tunnel alignment is covered with thick grass and second growth trees thus obscuring the bedrock. Damsite The geologic mapping work was carried going upstream. The igneous rock suite consisted of basalt, agglomerate and andesite that characterize the damsite. No visible presence of limestone was noticed. Dam Reservoir The reservoir side of the dam as expressed by topography seems also to be underlain the same igneous rocks ( basalt, agglomerate and andesite ) capped by coralline limestone at higher elevation further upstream of the damsite. CONSTRUCTION MATERIALS There are sand and gravel bars and boulders upstream located 0.5 kilometer and 2.0 kilometers away from the dam axis that can be extracted for concrete aggregates. CONCLUSIONS AND RECOMMENDATIONS Powerhouse and Damsite Slightly weathered but hard layered igneous rocks were noted at the site of the powerhouse at river level which are suitable for foundation. The surface indication should reflect the sub-surface characteristics. Based on topography, the damsite appears to be in igneous rock formation consisted of basalt and pyroclastic rocks, chiefly agglomerate with intercalations of basalt and andesite. This is corroborated by the statements under Regional and Local Geology topics enumerated in the report, Dolores River Hydropower Potential ( Pre-Feasibility Study ) dated December 2012. Headrace and Penstock Tunnel The alignment of the headrace and penstock past the location of the surge tank and / or forebay are vegetated with soil cover of an undetermined depth. Subsurface Explorations The sites of the proposed engineering structures shall be explored by drilling employing a rotary rig using NX size diamond coring bit attached to a double or triple tube core barrel. Drilling shall be accompanied by Standard Penetration Test ( SPT ) with an interval of 1.00 meter in the first 6.0 meters and at 1.50 meters intervals below. Where soft, cohesive soil is encountered with (SPT N-Value equal or less than 8), undisturbed sampling ( UDS ) using Shelby tubes has to be undertaken. For the subsurface exploration program, three ( 3 ) holes shall be drilled along the dam axis, one ( 1 ) on each abutment and one ( 1 ) along the river channel.

For the headrace and penstock alignment, one ( 1 ) hole shall be drilled at the intake, one ( 1 ) hole at the surge tank and / or forebay, two ( 2 ) holes at the powerhouse and one ( 1 ) hole at the tailrace tunnel or a total of 8 holes for the selected scheme.

0-7. DESIGN AND PLANT SIZING

(Engr. Arsenio Macaspac Hydrologist/Designer/Planner, EDCOP)

A study that assessed the hydropower potentials of the area was undertaken in 2010 where 5 alternative sites were evaluated. Out of the five alternatives, the study arrived at the downstream-most site, the 5th alternative, as the most viable hence was recommended for further study.

In wanting to solicit a third opinion on the hydropower potentials of the Dolores River, Iraya Energy hired an independent Water Resources Engineer who found another scheme downstream of the 5 potential sites previously made now the 6th alternative. The 6th alternative showed that the 5th alternative missed a very large tributary to the Maslog river that increased the discharge by about 43.3%. It must be noted that energy generation in hydropower is a function of head and discharge, meaning the higher the head and/or the larger the discharge the more energy generation.

Shown in Figure A (Comparison between 2010 vs present schemes) are the comparative features of the two schemes, the previous 5th alternative (5th scheme) and the present alternative (6th scheme) as they are laid out on the same river with different locations.

During the present study, an instrument survey was undertaken on Dolores River that more or less agreed with the NAMRIA and Google maps on the difference in elevations between the damsite and the powerhouse site. It also showed that the heads of the previous and present scheme are about the same in height. That means the main difference between the previous and present study is the discharge that

proves the energy generation of the present scheme is larger than that of the previous scheme by about 43.3%.

The downside of the present scheme is the length of its headrace tunnel which is about 700 meters longer than that of the previous scheme as seen in Figure A. However, this additional cost is merely incremental as it increased the cost of only one item, the tunnel, while the 43.3% increase in energy generation has an over-all positive effect in the financials.

It is in this light that the present scheme is found more superior than the previous scheme in terms of benefits.

7.1 THE PROJECT DESCRIPTION

The scheme of development of the present study will compose of the Dam, Power Intake, Silting Basin, Headrace Tunnel, Surge Tank, Penstock, Powerhouse and the Tailwater Outlet. Individually, these structures are described as follows: See Figure B (Maslog Plan of Development).

Figure B

a. Dam-

The dam will be of medium height at 15 meters from river bed to ogee crest elevation and ungated. A dam without spillway gates is preferred for socio-economic reasons. It is our experience that a gated dam is oftentimes blamed as the cause of flooding for undue flood releases. An un-gated dam merely releases what floodwaters naturally enter the pondage created and may even mitigate historical floods. A sluice gate about 3.0 meters in width however, with flat floor and breast wall will be provided at the right side of the dam to evacuate sediments occasionally deposited. It will be located at the narrow section of the river just downstream of a gaping valley with gentle slopes that is bound to create a relatively wide pondage. As estimated from NAMRIA maps, with a height of 15 meters the dam is expected to enclose an area of 120 hectares that can be used for daily regulation. This has to be validated in an actual survey during the Feasibility study.

The dam ogee will be at Elevation 121.0 meters and since no gates will be provided, it shall be designed long enough to pass the floods required and limit the height of the dam crest elevation. With provision for the 200 year flood of about 1,415 cubic meters per second, the crest will be at Elevation 127.0 meters including the freeboard. The reservoir with a surface area of 288 hectares can provide enough volume of water for daily regulation with a drawdown of less than 1 meter. The pre-feasibility study shall include a daily peaking operation analysis.

b. Power Intake

The Power Intake will be placed at the right side of the river where it will be strategically located such that there will be low hydraulic losses and that floating debris could easily be deflected. Its centerline therefore will be set at about 100 degrees with that of the dam axis. Entrance to the power intake will measure 6 meters height and 5 meters width tapering into a 3.2 meters opening 15 meters at the end where the headrace tunnel starts. That portion between the intake gate and tunnel section will be steel lined.

The intake structure will be reinforced concrete well anchored to sound rock. It will be equipped with a vertical sliding roller type steel gate with opening dimensions of 3.2 x 3.2 meters and protected from debris by a fixed and inclined trash racks measuring 6 x 7 meters. A bulkhead gate shall also be installed upstream of the intake gate to be operated during the servicing of the intake gate.

Water surface at the gate entrance will be at Elev. 121.0 meters. In anticipation of a future daily peaking operation, the gate entrance should be lower than this elevation by about the same depth as the drawdown in a daily peaking operation. This will be determined during the feasibility study. Without the peaking mode of operation, the invert of the power intake shall not be higher than Elev. 111.4 meters to prevent vortex formation.

Before the inflow enters the Power Intake, a silting basin will be positioned upstream to exclude sediment with grain size greater than 0.2 millimeter. This grain size was experienced to be detrimental to turbine blades as a result of abrasion.

c. Silting Basin

To prevent sediments with grain size 0.2 mm and above from entering the power tunnel, the silting basin should measure 22 meters in width by 40 meters in length by 6.75 meters in depth. Due to the contours at the right bank of the river just before the entrance to the headrace tunnel, a narrow cross section for the silting basin was chosen, although its depth is more when the cross section is wider.

The silting basin shall have two compartments in order not to disrupt operation of the plant while clearing one compartment from sediments. One compartment will be closed while cleaning and flushing of deposited sediments and both compartments are open during normal operation.

d. Headrace Tunnel

Length of the headrace tunnel is 1,920 meters and has a diameter of 3.2 meters with a longitudinal slope of 0.0003067. It will be submerged preparatory to the possibility the plant will be operated as a daily peaking plant. Its invert will be at an elevation where the tunnel entrance will still be submerged at maximum drawdown of the reservoir. This will be determined in the Feasibility study. The tunnel will be subjected to slightly high pressure particularly for some portions near the surge tank where it will be exposed to hydraulic transients.

The headrace tunnel will be lined with concrete 30 to 40 centimeters thick to prevent seepage and to support the tunnel walls.

e. Surge Tank

The surge tank shall be a Restricted Orifice Type with an internal diameter of 10 meters using the Thomas Equation. It shall be lined with concrete 1.0 meter thick to prevent leakage and to support the side walls. The maximum surge level will be at Elev. 123.8 meters while the minimum surge level will be at Elev. 108.6 meters. The location of the surge tank is on a gently sloping area hence will allow limited horizontal space for the required size.

The top of the tank will be about 3 meters above the lowest ground surface and will be covered for protection against foreign objects that may enter the penstock.

The surge tank will absorb the effects of pressure surges caused by water hammer and also provide additional water to the turbines as the pressure drops following the load demand.

f. Penstock

Total length of the penstock is 303.0 meters and all will be in in open ground. The upper portion of the penstock as it daylights from the surge tank will be a concrete anchor block. All major bends along the penstock will also be provided with concrete anchor blocks while in-between the anchor blocks will be concrete pier supports.

A 3.3 m diameter penstock was chosen in accordance with the economic sizing formulae of Sarkaria and Fahlbusch and that this size of steel pipe can be manufactured locally.

Applying the Allievis Theory and with a water hammer wave velocity of 1,000 meters per second and a closing time of 10 seconds, the maximum water hammer will be 31.5% over the hydrostatic head. The steel penstock will be of sufficient thickness to withstand this water hammer pressure.

A general slope of about 14.3% from the base of the surge tank down to the powerhouse exists between the two structures hence is favorable construction-wise. A straighter alignment will be defined in succeeding studies to minimize hydraulic losses in the penstock.

g. Powerhouse

The powerhouse design will be guided by the choice in the number of turbines. More than one turbine arrangement requires more floor space but a lower roof level and a smaller gantry crane than for one turbine. The machine hall will be divided into three floors; the butterfly valve floor, the turbine floor and the generator floor level.

The more critical aspect however is the setting of the turbines where the tailwater level at full operating flow and capacity must not be more than 1 meter below the turbine centerline and that the powerhouse floor level will be lower than this centerline by 0.4 meter. This arrangement is to avoid cavitation at the turbine runner.

The powerhouse is to be located at the terrace of the right bank of the river where it is relatively flat. Existing site elevations at the powerhouse site favors a minimum of excavation to attain the required turbine setting.

In the event the owner would opt to operate the plant for daily peaking in the future, particularly if the cost of peaking becomes lucrative, a third unit will be reserved and blocked out for future installation.

With the possibility of housing 2 turbine units plus the reserved unit, the space needed will be more.

h. Tailwater Outlet

Tailwater structures consist of the draft tube deck and tailrace channel. From the draft tube, a short tailrace channel expected to be about 10 meters in length will conduct the turbine outflow directly back into the river.

Elevation of the bottom will vary with a slope of 0.001. Normal Tailwater Level will be at Elev. 72.0 meters while the Design Flood Level will be at Elev. 75.0 meters.

Tailrace channel will be concrete lined and at its outlet into the river, concrete training walls will be placed to protect the channel from floods. Obstructions to the river flow should be cleared in order to allow free flowing tail water without affecting the designed tailrace levels.

MODE OF OPERATION AND SIZING OF THE HE PLANT

In this study, the sizing of the Maslog HE Plant will be based on the assumption that operation mode will be run-of-the-river. As such, the capacity and energy capability will be computed with a constant headwater elevation fixed at the crest of the spillway. All the water that flows into the reservoir will be utilized by the plant and any excess of the plant capacity will be evacuated through the spillway. This operation will maximize energy generation as no drawdown is allowed.

However, the use of the reservoir for daily peaking should be exploited considering the unique characteristic of the topography upstream of the dam where the slope of the river is very smooth at about 0.002105 for 9 kilometers. With a dam height of about 15 meters a reservoir 120 hectares in area will be created. This pondage area will only be drawn down for about 0.56 meters with a plant capacity of 20 MW peaking for 6 hours per day,

The estimated capacity using the run-of-the-river mode is 10.5 MW with and annual energy generation of about 49.2 Gwh equivalent to a Plant Factor of about 53.5%. See Figure C (Summary Power Capacity). With daily peaking mode, the energy generated will be lower at 48.5 Gwh due to the reservoir drawdown.

MASLOG SUMMARY OF POWER CAPACITY ESTIMATE

NET

HEAD= 40.9 Flow to Flow to

Shaft Combined Actual Shaft Energy

FDC

FDC less environment

Availability %

No of days FDC Turbine

Turbine Power Kw Efficiency

Power (Kw)

Generated Kwh

65.10 64.4 5.0 18.00 64.39 64.39 64.3870 25,792 0.92

10,50

0 4,536,000

51.96 51.2 10.0 18.00 51.25 57.82 57.8170 23,160 0.90

10,50

0 4,536,000

33.00 32.3 20.0 36.00 32.29 41.77 41.7670 16,731 0.89

10,50

0 9,072,000

29.07 28.4 25.0 18.00 28.36 30.32 30.3220 12,146 0.88

10,50

0 4,536,000 25.60 24.9 30.0 18.00 24.89 26.62 26.6220 10,664 0.92 9,811 4,238,378 19.82 19.1 40.0 36.00 19.11 22.00 21.9970 8,812 0.92 8,107 7,004,102 12.15 11.4 50.0 36.00 11.44 15.27 15.2720 6,118 0.89 5,445 4,704,214 9.04 8.3 60.0 36.00 8.33 9.88 9.8820 3,959 0.88 3,483 3,009,738 8.10 7.4 70.0 36.00 7.39 7.86 7.8570 3,147 0.87 2,738 2,365,795 7.13 6.4 80.0 36.00 6.42 6.90 6.9020 2,765 0.87 2,405 2,078,239 6.30 5.6 90.0 36.00 5.59 6.00 6.0020 2,404 0.84 2,020 1,744,924 4.52 3.8 100.0 36.00 3.81 4.70 4.6970 1,882 0.84 1,588 1,372,032 Idle 5 - - - 365 Total 49.20 gwh

Plant Factor= 53.5%

0-8. ACCESS, LOGISTICS, PEACE & ORDER

Maslog is located in the inner north-eastern part of the Samar island. Like most hydroelectric sites, it is in a remote part of the province. It can be reached from the town of Dolores by a 35-kilometer farm to market road or by boat via the Dolores river. While the farm to market road is unpaved and bridges need reinforcement, construction equipment and materials can be transported. The site in is barangay Carayacay is some 6 kilometers away from Maslog. There are old logging roads that can be cleared to get to the site.

Tacloban City and Catbalogan City are the supply ports to the site. The national highway connects these ports to Dolores 3 hours away. Supplies and equipment may also be shipped in to the Dolores port.

The site is replete with aggregates such as sand, gravel and boulders.

In the 1970s to the early 1980s the New Peoples Army had a considerable presence in Samar especially in the north. However, in the last 20 years the rebels have been neutralized and have for the most part disappeared. From the numerous trips for initial investigative surveys in 2010 to as late as April 2014 field studies no security arrangements were needed and no disturbance observed. Teams have spent weeks in the jungles without a single incident.

0-9. MARKET

Maslog is connected to the national grid by a 13 kv line tapped to NGCPs 69 kv line in Taft, Eastern Samar 35 kilometers away. The power house will be located 6 kms from the municipality of Maslog. The substation at Taft is connected to the NGCP sub-station in Wright, Western Samar. Essentially, all major islands in the Visayas are already interconnected via submarine cables. From Leyte, the grid passes through Samar and submarine lines connect Samar to Luzon. Power is brought to the various load centers by the Visayas grids network of transmission lines, which form the backbone of interconnection from sources to load centers.

Maslog can the accessed by a 35-km farm to market road or by boat. A network of old logging roads can be cleared and paved to access proposed the dam site and power house.

Essentially, all major islands in the Visayas are already interconnected via submarine cables. Power is brought to the various load centers by the Visayas grids network of transmission lines, which form the backbone of interconnection from sources to load centers.

Eastern Visayas primary source of electricity is supplied by the Visayas grid. One of the generation plants supplying the grid is the Tongonan geothermal power plant located in Leyte province. The main source of all of Samars electricity comes from this plant. However, due to the high demand of Cebu and Bohol, the bulk of Tongonans energy generation is sold to these higher-paying islands. In the past when the government through the NPC was still responsible for the development of generation and transmission facilities, meeting an increasing demand was planned and commissioned to serve additional loads in the grid. In recent years however, with the deregulation of the power industry, new power plants being commissioned are very few and far between. The increasing demand, coupled with the lowered dependability of existing power plants, as well as outages in transmission lines have caused shortages in the delivery of electricity to the provinces.

For the Samar Island, there are four (4) electric cooperatives supplying the island. These are the Northern Samar Electric Cooperative (NORSAMELCO), the Samar Electric Cooperative I (SAMELCO I) and the Samar Electric Cooperative II (SAMELCO II) for the western part of the island, and the Eastern Samar Electric Cooperative ( ESAMELCO). The cooperatives hold the franchise for the distribution of electricity to end-users. All cooperatives presently have supply contracts with NPC/PSALM, which expired in 2013. From the standpoint of a reliable and firm supply of power within their franchise areas, the development of power plants will certainly be advantageous not only to the cooperatives and their customers but also eventually to the provinces progress and development. It will also reduce transmission costs and losses.

MARKET PROFILE

Purchased Peak Net NEA NEA Electricity

Coop Power Load Profit/(Loss) Repayment Credit Rating Price

ESAMELCO 60,660,103 13 mWts

20,707,829.00 95.00% A 10.277

SAMELCO 1 52,586,251 11 mWts 1,357,247.00 100.00% A+ 10.2646

SAMELCO 2 5,464,831 13 mWts 4,388,453.00 100.00% A+ 8.8892

Esamelco, Samelco 1 and Samelco 2 are rated high by NEA and are therefore bankable cooperatives. Norsamelco is not and ideal offtaker.

Because this plant is connected to the grid, generated energy can therefore be spot traded to the Wholesale Electric Supply Market (WESM). Being a renewable source, it enjoys a fist dispatch status. Additionally, its can benefit from the Feed In Tariff presently approved at Php 5.90 per kilowatt hour.

Iraya Energy is currently negotiating a bilateral agreement with Esamelco (host coop) at Php 6.10 per kWhr. The DOE has issued a circular that grants the first-to-commission a Feed In Tariff of Php 5.90.

10. SUMMARY AND CONCLUSION

! This pre-feasibility study was undertaken by a team of hydrologists, geologists,

electromechanical, civil engineers and design engineers from the Engineering Development Corporation of the Philippines (EDCOP) and independent consultants from late 2013 to April 2014.

! EDCOP is the countrys leading hydroelectric consulting firm used by most local financial institutions for pre-funding review and evaluation. Extensive/onsite topographic, geologic surveys and river mapping to validate available National Mapping and Resource Information Authority (NAMRIA) and Google Earth data. The physical and technical parameters including the cost of each scheme were established and evaluated .

! Engr. Arsenio Macaspac, MHEPPs designer and planner is 84 years old. Considered the father of the countrys hydroelectricity, he has spent his entire career in the field having been involved in the development of most of the countrys major plants the likes of Magat, Agus, San Roque when he was with the National Power Corporation. Engr. Leandro Agudo, MHEPPs geologist is 78 years old has worked in tandem with Engr. Macaspac. Irayas COO Engr. Ding Diaz had a successful career with NPC running major thermal plants. He has also recently been involved in pre-development of hydro plants.

! The 2 most attractive schemes are located in one and the same location at latitude 120736.779 longitude 1250931.233 for the dam site which is at 102.89 meters above sea level. The power house at 120751.264 long 1251025.305 is at elevation 74.16 meters. The natural head is 28.73 meters.

! The more preferred scheme would be 10.5 megawatts as it requires a dam of only 15 meters yielding lower Capex and better returns than a 40-meter dam at 20 megawatts. The lower dam is easier and quicker to commission. As a run or river hydro plant, there is minimal inundation and ecological impact.

! The site recommended maximize the watershed/drainage area, has the optimum elevation differential between the dam site and power house, the narrowest diversion point, the ideal geology for dam foundation and topography for straight tunnel location for the headrace and surge tank.

! The development schemes were established by calculating economic indicators such as the B/C Ratio, Net Benefits, Generation costs in PhP/kWh, Internal Rate of Return, WACS and others.

! At a Feed In Tariff rate of Php 5.90 per kilowatt hour, the 10.5 megawatt plant option yields a viable levered IRR of 32.58%.

! The plant will be connected to the national grid and can therefore be traded on the spot market, go bilateral with a top-rated coop or a private off-taker and be assured of the minimum FIT rate of Php 5.90/kwhr. By trading on WESM, the plant can take advantage of peaking rates. With an average energy generation cost of Php 1.63 there is healthy margin.

! The 10.5 MW installed capacity can easily be absorbed by any two (2) existing cooperatives in the Samar Island (Such as ESAMELCO and SAMELCO1) assuming all their current and future demand will be sourced from this project. Both electric cooperatives (ECs) have projected their demand in 2014 at 11 MW;

! The Renewable Energy Act affords this project the following incentives: 1. First dispatch. The grid has to buy from a renewable energy source first before fossil. 2. Income Tax Holiday for the first 7 years. 3. 10% Income Tax after 7 years and beyond versus any ordinary business entity at 32%. 4. NO Vat. 5. Tax Exemption of imported plant materials and parts.

! ESAMELCO, the host EC buys its electricity from NPC/PSALM at a rate of Php 4.7855 with an

NGCP Transmission Charge Php 1.1068 which can be eliminated by sourcing it from Maslog which is within Esamelcos service area. Due mainly to the distance from the Tongonan source, Esamelco charges its customers Php 1.0523 for System Loss. /kWh. Php 1.1068 is charged for transmission. MHEPP being within Esamelcos service can reduce or eliminate the said charges.

! DOE, in its 2009 2030 Power Development Program for the Visayas grid has indicated that the earliest time that a 100 MW baseload plant is required will still be in 2018. However, the requirement for a 150 MW peaking plant was immediate at 2009. No peaking plant has come on line yet, so a project with peaking capabilities albeit on a daily basis will be very much welcome;

! The projects pondage or reservoir created behind the dam will help to increase firm energy generated. The pondage will also allow operation to serve peaking requirements on a daily basis.

! The gaging station that was established and operated during the period form 1950 to 1970 served to provide hydrological information needed to design and plan the project.

! Currently the dam was assumed to be of the concrete gravity type. The foundation also allows the use of the rockfill type of dam since available materials for construction are abundant. The decision of which type of dam to use should be made during the feasibility study stage where site investigations will be undertaken and where additional information can be known. The choice of dam will only serve to improve the cost of the project;

! Given the schedule of implementation and the various activities still to be undertaken, the earliest project completion is in 2017.

! Given the ideal hydrology, geology, topography, capex, demand profile, logistical access, renewable energy incentives and the relatively lower cost of funds, MHEPP is a financially viable investment. At a 70/30 DE Ratio, USD$3.0 M per mWt Capex with a 10-year tenure at 8%, the levered IRR = 32.58%.

11. PROJECT MILESTONES

Almost shovel-ready, Iraya Energy has already obtained the following:

Hydro Electric Service Contract from the Department of Energy Environmental Compliance Certificate from the Department of Environment & Natural Resources Endorsements from the Protected Areas Management Board Obtained Local Government Endorsements. Water Rights application has been submitted to NWRB Indigenous people exemption has been filed In negotiations with offtakers In negotiations with strategic equity partners Hydrologic analysis and observations conducted Actual Geodetic Surveys, Topographic Mapping & River Profiling Actual Geologic assessment done Plant design and sizing done

12. THE TEAM

Mr. Ruben Diego Picardo President/CEO, Iraya Energy

Engr. Armando Diaz COO, Iraya Energy, Electro-Mechanical

Mr. Matthew Nieto VP Admin/Environmental Sustainability

Engr. Arsenio Macaspac Hydrologist/Designer/Planner, EDCOP

Engr. Leandro Agudo Geologist, EDCOP

Engr. Roy Arbolante - Electro-Mechanical/Planner, EDCOP

Engr. Isabelo Abellon Hydrologist

Engr. Silvano Lambino - Hydrologist

Engr. Joseph Basilio Geodetic Engineer, H.O. Noveloso Surveying

***CVs available upon request

13. PHOTOS

(DAM SITE)

(DAM SITE)

(POWER HOUSE LOCATION )

(CASSAPA FALLS TRIBUTARY)