Meralco PowerGen, JV partner secure P42.15-B loan for Quezon plant project

by Myrna Velasco – December 1, 2015

from Manila Bulletin

Agreements have finally been sealed on the P42.15 billion debt facility that the power generation subsidiary of Manila Electric Company (Meralco) and its project partner had secured for their 500-megawatt coal plant project in Quezon province.

The ceremonial signing was concluded Friday (November 27) between the lender-banks and project company San Buenaventura Power Ltd.Co. (SBPL), a joint venture between Meralco PowerGen and New Growth B.V. of Thailand’s EGCO Group.

In a statement provided to media, SBPL noted that the senior term loan lenders have been BDO Unibank Inc., China Banking Corporation, Metropolitan Bank & Trust Co., Philippine National Bank and Rizal Commercial Banking Corporation.

Tapped as joint bookrunners and joint issue coordinators are BDO Capital & Investment Corporation and First Metro Investment Corporation. They also acted as the transaction’s joint lead arrangers along with Chinabank, PNB Capital and Investment Corporation and RCBC Capital Corporation.

The project sponsor firm has noted the loan proceeds “will be used to fund the construction of SBPL’s coal power project.” The planned facility vouches of being the first in the country to be equipped with supercritical technology of the so-called ‘clean coal tech’ genre.

SBPL has explained that compared to the subcritical power plants, those running on supercritical technology “operate at higher pressures leading to higher efficiencies and significant reductions in emissions over the expected life of the plant.”

As designed, the project will be developed on a typical project finance portfolio of 70-percent debt; and 30-percent equity from project sponsors.

The power plant is expected on stream in 2019 and it will be supplying the requirements of Meralco via the 20-year power supply agreement (PSA) that was sealed with SBPL.

The generation rate for the plant as approved by the Energy Regulatory Commission (ERC) had been set lower by P0.12 per kilowatt hour (kwh) compared to what SBPL originally applied for  at  P4.2801 per kwh.

It has also been previously reported that the engineering, procurement and construction (EPC) contract for the project was cornered by the joint venture of Japanese firm Mitsubishi Heavy Industries and Korean firm Daelim.