P40-B bank loan for Quezon coal plant almost final

Business Mirror
by Lenie Lectura - August 31, 2015

THE P40-billion bank loan of the joint venture of Meralco PowerGen Corp. (MGen) and Thailand’s New Growth BV is almost final. The loan will partly finance the 455-megawatt (MW) coal-power plant in Mauban, Quezon.

“We are very near closing. We expect to sign mid-September with a consortium of five banks. There will be two mandated colead arrangers,” Manila Electric Co. (Meralco) Chief Financial Officer Betty Siy-Yap said in a text message.

The financial closure for the project was supposed to take place last month but Yap said last week that the joint venture, San Buenaventura Power Ltd. Co. (SBPL), was still finalizing the number of lender banks.

“For now, it’s five banks but we need to address one last item. If we get that done, then that’s five. If the transaction is not done by the time of the signing, then it will be four banks,” Yap said. She declined to identify the local banks “until we have finalized it.” The loan, she added, will have a term of 12 years.

MGen is the power-generation arm of Meralco. New Growth BV is a wholly owned subsidiary of Electricity Generating Public Co. Ltd. of Thailand. Meralco will source part of its power requirement from SBPL. A power-supply agreement between SBPL and Meralco was earlier approved by the Energy Regulatory Commission. The Mauban coal-power project will serve as an expansion of the 460-MW Quezon power plant, which started commercial operations in 2000. The existing plant serves the Luzon grid under a 25-year power-supply deal with Meralco. The financial closure is an essential component of the power project. MGen is also working on to award an EPC (engineering, procurement and construction) contract.

Construction is scheduled to start this year, while commercial operation is set at end-2018 or early 2019.

The Meralco group is also keen on bringing in more major power-generation projects.

MGen and other partners are also expected to raise “higher than P40 billion” for another power project.

Redondo Peninsula Energy Inc. , a joint venture among MGen, Aboitiz Power Corp. and Taiwan Cogeneration Corp., is putting up a 600-MW coal plant in Subic, Zambales.

Besides these two projects, MGen is also working on a 1,200-MW Atimonan plant in Quezon.

The company is also in talks with Japanese firms for a potential 1,500-MW liquefied natural gas project.

With three major projects in the pipeline, MGen expects to build a 3,000-MW portfolio.

“The three alone are more than 2,200 MW. We also have attributable interest in Global Business Power Corp. [GBPC], so 3,000 MW is quite achievable,” Meralco Chairman Manual Pangilinan said. MGen is also part of GBPC through its 22-percent interest. GBPC owns two 82-MW plants in La Paz, Iloilo City.

With all these projects, Pangilinan said MGen’s “plate is already full…. From the working numbers, the investments are fairly sizable.” source