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.