Published June 26, 2018, 10:00 PM By Myrna M.
Velasco
Oriental Energy and Power Generation
Corporation will be putting up the 18-megawatt Timbaban hydropower project to
be sited in Madalag, Aklan in the Visayas grid, according to the stock exchange
disclosure of its parent firm Oriental Peninsula Resources Group, Inc.
For the venture, the parent company
will be subscribing to 300 million worth of shares of subsidiary Oriental
Energy, as part of the cash infusion strategy on the hydropower project.
Oriental Peninsula further noted
that it will enter into a corporate guaranty for Oriental Energy’s obligations
“under the bank loan facilities of the Development Bank of the Philippines up
to an aggregate amount of R2.0 billion.”
The loan facility, it was
emphasized, shall carry a fixed interest rate of 6.75-percent per annum or the
applicable repriced interest rate.
Oriental Peninsula said “the
borrower shall utilize the amount to partially finance the project cost and
related expenses” pertaining to the construction of its 18MW hydropower plant.
The loan will be for 12 years, but
the parent firm’s guaranty “shall be extinguished earlier upon delivery by the
borrower to the lender of proof of project takeover.”
The other condition rests on the
issuance of a certificate of endorsement that shall be rendered by the
Department of Energy (DOE) on the project’s eligibility for feed-in-tariff
(FIT) incentives.
The company noted that its Timbaban
hydropower plant will start commercial operations prior to the expiration of
the FIT incentives as prescribed by the energy department.
The option on the plant’s capacity
off-take is also the signing of a power purchase agreement (PPA) between the
borrower-firm and a counterparty that shall be acceptable to the lender.
Aside from the Timbaban hydropower
venture, Oriental Energy has also projects of in Manolo Fortich in Bukidnon and
Odiongan in Romblon. (MMV)
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