Suweco to raise P4B for hydro projects

Business Mirror

Published on Sunday, 27 January 2013 18:22

Written by Lenie Lectura / Reporter

SUNWEST Water and Electric Co. Inc. (Suweco) is planning to raise P4 billion to finance four hydropower projects.

Company officials said in a press briefing on Friday that financing will include a combination of loan and equity.  “Part of it is equity and part is bank loan because these are huge projects,” said Suweco President Jose Silvestre Natividad.

A syndicated loan is being arranged with a consortium of banks. Suweco said it may tap Security Bank, Land Bank of the Philippines, Development Bank of the Philippines, China Bank, Veterans Bank, Philippine Bank of Communications and BDO Unibank for the loan facility.

The planned hydropower projects are the 15-megawatt (MW) Main Aklan River, 6-MW Pinacanauan in Cagayan, 9.4-MW Villasiga 2 in Antique and 1.5-MW Bansud in Oriental Mindoro.

Of the four projects, Suweco said it has already secured service contacts for the ones in Aklan and Cagayan. Applications for the remaining two are pending with the Department of Energy.

“It normally takes two to three years of installation period. Of the four Villasiga 2 will start construction probably by the second quarter of this year and Bansud sometime in the first quarter of 2014,” said Natividad.

Villasiga 1 will commence commercial operations this year. To date, it is about 85-percent complete and is expected to start generating power with an annual  31.4-gigawatthours capacity starting June. This facility will utilize the Paliuan River as power source.

In all, Suweco has currently a project portfolio of 59 projects at different stages of development.  The 59 projects are expected to generate a total capacity of around 280 MW in the next 10 years.

It takes P180 million in investment to produce 1 MW of power, Suweco estimates show.  “We are planning to commission at least one facility per year up to 2020,” added Natividad.

The company’s hydropower projects are a response to the government’s call to increase the estimated current energy supply of the country from renewable energy from the current 20 percent to 50 percent in the next 15 years.

Incorporated in 2005, Suweco envisions to be a major supplier of clean renewable energy, particularly in the rural areas which are not currently serviced by the national grid.

The company’s first foray in renewable energy development is through the successful implementation and operation of two mini-hydropower projects in Catanduanes—Solong (2.1 MW) and Hitoma 1 (1.5 MW).

Suweco is part of the Sunwest Group of Companies, a brainchild of Legazpi-based entrepreneur and businessman Elizaldy S. Co.  who serves as the group’s chief executive officer.

Officials said the company may soon hold in an initial public offering.   source