By Lenie Lectura - July 23, 2017
“It’s BPI and PNB. They are two of the major lenders,” Meralco President Oscar Reyes said.
Meralco, through Meralco PowerGen Corp. (MGen), will construct a 2×600-megawatt ultra-supercritical coal-fired power plant in Atimonan town, Quezon province. The project, which is going to be country’s first ultra-supercritical plant, will be undertaken by Atimonan One Energy Inc. and will cost about P135 billion.
The company was hoping to finalize last quarter a P100-billion loan with eight banks to finance a huge portion of the project cost.
“My recollection is that the total project cost would be in the order of P135 billion. The projected debt level is about 70 percent of that so it would be anywhere between P90 billion to P100 billion. [About] 75 percent of that cost is about a P100 billion. The balance of P35 billion will be equity,” Meralco Chairman Manuel Pangilinan said.
According to Meralco Senior Vice President and CFO Betty Siy-Yap, the loan component is “the largest project finance because the last largest was San Buenaventura at P42 billion.”
It has yet to close a financing deal with the banks, pending regulatory approval of its power-supply agreement (PSA).
MGen signed in April 2016 a 20-year PSA with Meralco for the full output of the plant, and filed with the Energy Regulatory Commission (ERC) for its final approval.
It has already secured the necessary permits from the Department of Environmental and Natural Resources and the National Commission on Indigenous People. Likewise, a certificate of land-use conversion for the resettlement site was issued.
“We continue to engage with ERC. We filed our application for PSA approval in April 2016. So, it’s been close to 16 months. The important thing is, every month, results in higher project cost because the EPC [engineering, procurement, construction] cost is increasing and exchange rates are moving. So, in order to ensure the viability of the project, and the lower price for consumers, it’s best if early approval can be given,” Reyes said.
Atimonan One is currently in the final stages of its selection and contract documentation process for an EPC contractor.
Last April, Pangilinan said Meralco has received offers from four interested firms that are willing to take in a minority stake in Atimonan One.
“There’s a final list of four” interested firms which are a mix of local and foreign. Pangilinan said “only one” would be chosen.
Pangilinan said his group would keep a majority stake in the power project and sell only up to 49 percent to the prospective investor.
“Up to 49 percent, there’s no decision what will be the exact percentage. Meralco will keep at least 51, I think it depends on the final decision on how much we will own for Atimonan. Definitely not lower than 51 percent, we will not sell control,” he said.