Panay Energy bags power supply deal

by Alena Mae S. Flores, 13 April 2015
from Manila Standard Today

Panay Energy Development Corp., a wholly-owned subsidiary of Global Business Power Corp., has signed a 25-year electric power purchase agreement with electric cooperatives belonging to the Panay-Guimaras Power Supply Consortium.

First Metro Investment Corp., the investment banking arm of the Metrobank Group, is the lead arranger for the P11-billion project loan facility of Panay Energy Development Corp. First Metro president Roberto Juanchito Dispo (in photo) said during the signing ceremony the project was in response to the looming power shortage in the country, especially in the Visayas area. Panay Energy, a unit of Global Business Power Corp., successfully raised the amount from a consortium of local banks. It will use the proceeds to finance the construction of a 150-megawatt coal power plant in Iloilo City.

The Panay-Guimaras consortium is an alliance of electric cooperatives in the Panay-Guimaras area formed to negotiate more competitive prices through aggregation of power requirements.

Iloilo Electric Cooperatives I, II and III, Antique Electric Cooperative and Guimaras Electric Cooperative signed an agreement with Panay Energy for the supply of 24 megawatts at the rate of P5.05 per kilowatt-hour, the lowest price of electricity in the Visayas.

The cooperatives will source power from Panay Energy to address their respective projected power demand in the next two to five years. The purchase agreement will take effect in July 2016 and will be sourced from Panay Energy’s 150-MW expansion project.

The Panay-Guimaras consortium adopted the Swiss Challenge procurement process to secure the best offer for its power supply requirement. Under the Swiss Challenge system, Panay Energy’s proposal went through the competitive bidding process which allowed other power generators to challenge its offer.

Global Business Power executive vice president Jaime Azurin said the successful outcome of the Swiss Challenge would be beneficial to the power consumers of Panay in terms of lower energy cost.

“Committed to provide adequate, reliable and cost efficient power supply, we support undertakings that serve the best interest of the consumers,” Azurin said.

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