GN Power secures $700-million bank loan to finance Bulacan coal-fired plant

by Lenie Lectura – January 14, 2016

from Business Mirror

GN Power Mariveles Coal Plant Ltd. has obtained a loan from local banks to partly finance the more than $1-billion, 660-megawatt (MW) coal-fired power plant in Mariveles, Bulacan.

An official of AC Energy Holdings Inc., which holds a 20-percent interest in the project company, said on Monday the signing took place in December last year.

“We signed with five local banks. We expect regulatory approvals, particularly from the BSP [Bangko Sentral ng Pilipinas], within the year,” AC Energy President John Eric Francia said.

He did not divulge the amount of the loan, but said companies ideally follow the 70:30 debt-to-equity ratio. If applied, this would mean that AC Energy and partners would borrow at least $700 million to finance the first phase of the power project.

“The first unit is over $1 billion,” Francia said, referring to the project cost.

The start of construction of the first 600 MW is targeted within the year. This means that GN Power Mariveles needs to close the financial aspect of the project prior to construction. “The target is to completely build the first unit in 2019. It normally takes three years to construct,” he said.

The company has tapped Shanghai Electric Power Construction Co. as engineer, procurement, construction contractor for the project.

The output of the first phase of the power project will be sold via bilateral contracts and auction

“It will be a combination of CSP [competitive selection process] and open access,” Francia said.

The second phase of the power project involves putting up another 600 MW of power-generating capacity in the area.

“There will be a sharing of some facilities for the second unit,” Frania said. US-based GN Power is owned by Naurua American firm Power Partners Ltd. Co. Aside from AC Energy, Sithe Global Power Llc., a company owned by investors of the Blackstone Group, is also part of GN Power.

Francia earlier said the expansion project, involving another 600 MW, would also be undertaken by the same partners. “Basically, it’s the same owners as GN Mariveles.”

The project company for the second unit is GN Power Dinigin.

AC Energy Holdings Inc. is the development arm of the Ayala group in the energy sector. The company is committed to build a portfolio of power-generation assets using renewable and conventional technologies.

Since 2011 Ayala has committed over $700 million in equity to develop conventional and renewable-energy sources.

AC Energy has currently assembled over 700 MW of attributable capacity, putting the company closer toward achieving its target of assembling over 1,000 MW of attributable capacity from power plants by 2016.