ATN in $69-M solar deal

by Riza T. Olchondra, 07 July 2015
from Philippine Daily Inquirer

Publicly listed ATN Holdings may tap as much as $69 million in financing for its 60-megawatt (MW) solar power project and related assets in Rizal province, according to regulatory documents.

In a filing with the Energy Regulatory Commission (ERC), ATN Holdings said its unit, ATN Philippines Solar Energy Group Inc. (ATN Solar), may avail of $50 million in engineering, procurement and construction or EPC financing from China Machinery Engineering Corp. or CMEC ($25 million) and Guangdong Electric Power Group ($25 million).

CMEC’s bridge loan will finance Phase 1 (30MW) of the project, which costs $36 million. Guangdong Electric is offering the bridge financing for either Phase 1 or Phase 2 (30 MW) of the project, ATN Holdings said.

In addition to securing project financing from contractors and suppliers, ATN Holdings said it will raise $10 million from new investors at the parent level “to partially fund the equity portion of financing the 30-MW solar project.”

To raise the $10 million, ATN Holdings said it intends to issue either preferred shares convertible to common; convertible debt; or a private placement of common shares.

The proceeds will augment the EPC bridge financing of $50 million, according to documents.

While the total prospective financing of $65 million exceeds the capital expenditure budget of $36 million for Phase 1 alone, ATN Holdings said its unit intends to secure a $4-million omnibus credit line from banks, or from the ATN Group “to forestall any delay in release of funds from EPC, and ensure the completion of the project.”

The bank loan will be secured by prospective payments from the Feed-in-Tariff (FIT) fund for eligible renewable energy (RE) developers. The National Transmission Corp. or Transco manages the FIT fund.

ATN Solar’s equity in the project is $16 million. On top of that its stakeholders infused $16 million in pre-development investment (RE service contract, permitting cost, engineering design, grid connection studies, LGU approvals, land-use conversion, etc.).

The construction and development cost for the total 60MW is $42 million, based on earlier filings by ATN Solar.

The solar project is designed to have initial gross generation capacity of 30MW through the Manila Electric Co. (Meralco) franchise distribution area via a 34.5-kV distribution line connected to the Diliman, Novaliches, and Parang circuits.

ATN Holdings authorized capital stock in 2014 amounted to P1.2 billion. This will be increased to P3 billion in 2015 to accommodate the entry of new equity investors and expand the solar PV business in the Philippines, the company said.

The solar energy solution is the appropriate technology to address the projected peak power deficit of 3,000 MW in Luzon, and mitigate the high WESM traded prices of P15-P20 per kilowatt-hour based on diesel power.

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