MGen finalizes loan for Atimonan project

November 28, 2017 By Victor V. Saulon, Sub-Editor

http://bworldonline.com/mgen-finalizes-loan-atimonan-project/

MERALCO POWERGEN Corp. (MGen), the power generation arm of Manila Electric Co. (Meralco), has agreed with lenders on the terms of a P107.5-billion loan to fund about two-thirds of its 1,200-megawatt (MW) coal-fired power plant in Atimonan, Quezon.

“We’ve come to an agreement with the banks,” said Betty C. Siy-Yap, Meralco senior vice-president and chief finance officer, in a chance interview on the sidelines of the Management Association of the Philippines annual membership meeting on Monday at the Bonifacio Global City.

MGen is borrowing from eight local banks in Philippine pesos. The company previously placed the project’s cost at P135 billion.

“We need the PSA (power supply agreement) before we can finalize that one (loan),” she said. “But there’s an agreement.”

However, Ms. Siy-Yap said MGen unit Atimonan One Energy, Inc. (A1E) could not draw down on the loan amount until the PSA had been approved. The supply contract is pending with the Energy Regulatory Commission (ERC).

“The financial close will be achieved when we have the PSA approval,” she said.

She said so far, the questions raised by the ERC regarding the PSA had been clarified by the Meralco group.

“So I think they’re in the final stages,” she said, adding that the questions asked by the regulator were largely technical in nature and had been answered.

Separately, Oscar S. Reyes, Meralco president and chief executive officer, said “the prospects are good” for the sell down of the company’s stake in A1E. Meralco previously said that it would maintain a stake of least 51% and would not cede control of the project.

“Initially we had eight or 10,” Mr. Reyes said on the number of entities interested in investing in the project. “We are down to a shortlist of four.”

Mr. Reyes said the final selection would depend on “certain approvals,” referring to the PSA.

Sought for comment, Meralco Chairman Manuel V. Pangilinan said: “We’re close to finding one. It’s gonna be a foreign company.”

Asked if the group had identified one, he said so far the selection is “a short list of companies.”

“These are companies that are listed in their home domain,” Mr. Pangilinan said.

Asked about the prospects of the PSA approval with the appointment of a new ERC chairman, Mr. Reyes said: “I personally don’t know the chair too well.”

On Friday, the ERC confirmed receipt of Malacañang’s appointment of former solicitor-general Agnes T. Devanadera as its new chairman.

“We’re all hopeful that with her filling the position, that she can lead the ERC moving forward,” Mr. Reyes said.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.

Poe urges Duterte to push emergency powers

By Paolo Romero (The Philippine Star) | Updated November 27, 2017 - 12:00am

http://www.philstar.com/headlines/2017/11/27/1762928/poe-urges-duterte-push-emergency-powers

MANILA, Philippines — With three weeks left before Congress adjourns, Sen. Grace Poe appealed yesterday to President Duterte to certify as urgent the pending emergency powers bill as the transportation crisis in the country continues to worsen.

Poe, chairperson of the Senate committee on public services, hopes that Duterte will certify Senate Bill 1284 or the proposed Traffic and Congestion Crisis Act so the measure will be approved and implemented immediately.

She said the “fastest way” to advance the measure is a Malacañang certification, just like other urgent measures immediately passed by Congress.

“The emergency powers bill will surely move (in the Senate) if Malacañang makes it a priority and certifies it to speed up the implementation of projects to ease traffic,” Poe said.

The measure remains pending in the chamber since Poe sponsored it for approval on second reading last year.

It seeks, among others, to reduce obstacles to the implementation of transportation projects, such as barring lower courts from issuing temporary restraining orders, for the duration of the emergency powers.

The committee recently met with officials of the Departments of Transportation and of Public Works and Highways; and Metropolitan Manila Development Authority requesting that they submit their concrete traffic crisis plans to the plenary after tax reform and budget deliberations are finished.

The agencies promised to submit a comprehensive report on priority projects that will be implemented during the duration of the proposed emergency powers before the session break.

A certification of urgency will allow Congress to pass the measure on second and third reading within the same day. The certification will also prompt her colleagues to work on the bill.

Poe said Duterte, who first floated the idea to address traffic gridlocks during his first State of the Nation Address, could also issue marching orders to his allies in the House of Representatives, led by a “super majority” coalition, and the Senate to pass the measure.

Sen. Joseph Victor Ejercito, vice chairman of the panel, earlier said granting emergency powers can ensure the speedy completion of many of Duterte’s P8-trillion “Build, Build, Build” infrastructure program.

Meralco expects soft sales growth in 2018

By Danessa Rivera (The Philippine Star) | Updated November 27, 2017 - 12:00am

http://www.philstar.com/business/2017/11/27/1762685/meralco-expects-soft-sales-growth-2018

MANILA, Philippines — Power distributor Manila Electric Co. (Meralco) expects softer growth in sales in 2018 after an unusually strong performance in the past two years, its top official said.

Meralco president Oscar Reyes said management still sees strong growth potential next year, but not as much as what the power distributor registered in the past two years.

“We’ve had relatively strong performance in 2016, 2017. We have to take it with context of high base in the past 24 months. We’re still calling for potential growth, let’s say 3.5 percent,” he said.

In 2016, energy sales went up 8.1 percent to 40,142 gigawatt-hours (gwh), which was beyond the power distributor’s estimates. This was driven by the El Niño phenomenon and election-related activities.

Despite coming from a high base, energy sales volume this year are expected to remain strong, albeit lower compared to the previous year, as demand continued to pick up in its franchise area.

“It’s been a slow start in the first three months. For the year, we are still seeing mid-four percent. We’re at 4.5 percent year-to-date as of end-October,” Reyes said.

Factors that dampened sales are the adoption of energy efficient measures by customers and the installation of solar rooftops within Meralco’s franchise area.

In 2015, Meralco saw solar-powered rooftops as a big threat to its traditional distribution business, which counts over 5.7 million customers within its franchise area in 2015.

This year, Meralco is looking to slightly surpass its core profit last year as the surprise surge in sales will be tempered by the intense retail competition and ongoing developments in its power generation business.

Last year, it booked a core net income of P19.58 billion and a net income of P19.18 billion.