Meralco raising P100-B loan for Atimonan coal-fed power project

Published April 26, 2017, 10:01 PM By Myrna M. Velasco

http://business.mb.com.ph/2017/04/26/meralco-raising-p100-b-loan-for-atimonan-coal-fed-power-project/

Power utility giant Manila Electric Company (Meralco) is firming up discussions with at least eight (8) banks for up to P100 billion worth of loans it will be raising for its two-phased Atimonan coal-fired power project of 1,200-megawatt capacity.

According to Meralco Chairman Manuel V. Pangilinan, the project’s total financing requirements would hover at P135 billion – and bulk of that at 75 percent will comprise the debt portion.

 “The debt component of that is P100 billion and the balance of P35 billion will be equity,” he reiterated.

The Atimonan power project is being advanced into implementation by the utility firm’s power generation subsidiary Meralco PowerGen via corporate vehicle Atimonan One Energy (A1E), Inc.

Alongside the targeted financial closing this 2017, Pangilinan indicated that partner selection is similarly ongoing from among the four interested parties in their shortlist.

“Meralco is taking the process and they have financial advisor for that… there’s a final list of four companies – combination of foreign and local companies,” he said.

Pangilinan added they can offer up to 49 percent equity to the prospective partner, and Meralco at the project company level could still maintain its usual tie-up approach of having a majority stake in such segment of its business.

“Up to 49 percent is under negotiation. Meralco at least will be picking one, depending on the final thinking on how much we should own,” he stressed.

Beyond financial closing and cornering a project partner, the company is also earnestly awaiting the approval of its power supply agreement (PSA) on the project’s capacity off-take (generated electricity purchase deal), which is still pending with the Energy Regulatory Commission.

Pangilinan qualified that achieving milestones for these specific steps in the project’s implementation would not be intra-conditional.

Nevertheless, he noted it is still “good for the banks to know that – if indeed we close the financing in the next few months, then the equity part should also be developed.”

Another major project development step being pushed is the award of the facility’s engineering, procurement and construction (EPC) contract that is similarly targeted within the year. The utility firm has at least three in its shortlist for this particular sub-component of the project.

The Atimonan power facility is due for completion and commercial commissioning in 2021 – strategically targeted for the country’s need for capacity additions within that timeframe.