Proponents set P33.3-billion fund raising for Pagbilao plant expansion.
Sponsor-firms are racing with a moving target by month-end to conclude deals for P33.309 billion in loans that will bankroll the 400-megawatt expansion of the Pagbilao coal-fired power plant in Quezon province.
In a disclosure to the Philippine Stock Exchange (PSE), Aboitiz Power Corporation which is the other half of the joint venture (JV) corporate vehicle for the Pagbilao expansion project confirmed that they tapped BDO Capital & Invesment Corporation, BPI Capital Corporation and First Metro Investment Corporation as joint mandated lead arrangers for the loan procurement. SB Capital Investment Corporation was tapped as co-lead arranger.
The Pagbilao 3 project will be undertaken in partnership with the designated corporate vehicle of TeaM Energy Philippines - namely TPEC Holdings Corporation. The Aboitiz group, on one hand, had incorporated Therma Power Inc. (TPI) for the JV arrangement.
Aboitiz Power similarly affirmed that the engineering, procurement and construction (EPC) contractor for the project is the consortium of Mitsubishi Hitachi Power Systems Ltd., Daelim Industrial Co. Ltd., DESCO Inc. and Daelim Philippines.
"Pagbilao Unit 3 will be built in the same location as the existing 700MW Pagbilao Units 1 and 2 coal-fired thermal power plant in Pagbilao, Quezon," the company said.
The two existing units of the Pagbilao plant with rated capacity of 700MW were built under the government-underpinned independent power producers (IPP) regime.
This expansion project, on the other hand, will be under the auspices of a merchant market - an industry set-up which thrived following the implementation of the Electric Power Industry Reform Act.
Unlike in the IPP era when investors could lean on sovereign guarantees and cross-default on the governments of sponsoring state-run firms, the merchant market arrangement transfers major investment risks to the private sector-developers of projects.
As the Philippine power industry braces through wobbly regulatory environment and flip-flopping policy cycles, investors have to brave both identifiable and yet-to-be known risks just to advance their projects to construction and help save the country from another round of power crisis.
The expanded Pagbilao plant is anticipated on stream around 2018 and it is lined up among the medium-term addition to the country's power supply.
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|Title Annotation:||Business News|
|Date:||May 16, 2014|
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