AES, partner investing $700m

by Alena Mae S. Flores – November 24, 2015 at 11:25 pm

from Manila Standard

AES Philippines, the local unit of AES Corp. of the US, and partner Electricity Generating Public Co. Ltd. of Thailand plan to invest over $700 million to build a 300-megawatt coal-fired power plant in Zambales province.

The project is an expansion of the existing 630-MW coal plant owned by both companies.

AES Philippines last year sold a 41-percent interest in the Masinloc power plant in Zambales and other projects in the Philippines to Egco in a deal valued at $453 million.

AES owns a net 51 percent in the Masinloc coal plant project after the sale, while Egco holds 41 percent. International Finance Corp., a the investment arm of the World Bank, owns 8 percent.

AES managing director in the Philippines Neeraj Bhat on Tuesday told reporters at the sidelines of an infrastructure forum organized by the European Chamber of Commerce of the Philippines Tuesday that about 70 percent of the project cost would be raised from debt and the balance from equity.

“Investment cost is north of $700 million… It will be locally funded by local banks. Signing will be very soon, before the end of the year,” Bhat said.

He said the company planned to construct a capacity of 300 MW and had the option to go up to 600 MW.

“Right now, we’re going to start with 300 MW as we line up contracts, we have the option to go for the full 600MW. But right now, we’re going for the 300 MW,” the official said.

Neeraj said Egco was the company’s partner in the existing Masinloc power plant “and they are participating in this as well.”

“We’ve signed a number of power sales agreements with northern Luzon and some other customers. We expect that to enter construction very soon with limited works this year, and to be online in early 2019,” Bhat said.

He said construction would be in full swing by the first quarter and that the company was set to award the engineering, procurement and construction contract.

The expansion of the Masinloc power plant has secured all key permits to start construction and discussions are underway with lenders and engineering, procurement and construction contractors.

Commissioning of the expansion plant is expected in 2019 to meet power supply obligations.

The company has already signed power agreements with seven electric cooperatives for a 20-year supply of 92 MW of busload power requirements starting in 2019 once the 300 MW-expansion starts operations.

AES Philippines earlier signed a supply agreement with electric cooperatives from Region 1 and the Cordillera Administrative Region (collectively, the R1 +CAR ECs).

The R1+CAR ECs are composed of Abra Electric Cooperative Inc., Ilocos Norte Electric Cooperative, Ilocos Sur Electric Cooperative, Kalinga Electric Cooperative, La Union Electric Cooperative, Mountain Province Electric Cooperative Inc. and Pangasinan III Electric Cooperative.