AES raises $525-M loan for Masinloc plant expansion

by Myrna Velasco – January 27, 2016

from Manila Bulletin

American firm AES Corporation and partners have closed US$525 million worth of loan facility that will bankroll the blueprinted 330-megawatt expansion of its Masinloc coal-fired plant in Zambales.

The consortium of lenders was led by the Bank of the Philippine Islands (BPI), with its banking subsidiary BPI Capital Corporation acting as the sole issue coordinator and one of the joint lead arrangers in the transaction.

The other joint lead arrangers have been SB Capital Investment Corporation, RCBC Capital Corporation and PNB Capital Corporation.

According to BPI, “the facility is denominated in US dollars and has a tenor of 15 years, inclusive of an up to four-year grace period during construction and will be made available in fixed and floating interest rate tranches.”

It added “the fixed interest rate tranche shall be subject to a re-pricing on the eighth year anniversary to set the interest rate for the remaining seven years.”

BPI Capital managing director Reginaldo A.B. Cariaso said such kind of credit facility helps “enable private sector operators such as AES Philippines to play a bigger role in delivering high- quality energy installations to address the increasing demand for electricity in the country.”

As designed, the planned power project expansion will be equipped with super-critical clean coal technology.

Its capacity has already been signed up to at least seven electric cooperatives in Northern Luzon for 20-year supply duration.

The project’s corporate vehicle is majority-owned by AES Corporation with 50.55-percent share; while the balance are held by Thai firm Electricity Generating Public Co. Ltd. (EGCO) Group with 41.35-percent shareholdings; and by the International Finance Corporation (IFC) with 8.10-percent equity.

The project will serve as expansion of the existing 600MW Masinloc coal plant, an acquisition from the asset privatization of the National Power Corporation.

“The partners intend to use the combined Masinloc platform as their vehicle for growth in the Philippines,” lender BPI has noted in its statement to the media.

The power facility’s capacity expansion had always been the major value-creating proposition that AES had considered when it purchased the Masinloc plant from state-run asset seller Power Sector Assets and Liabilities Management Corporation.