K-Water secures Angat hydro plant with San Miguel group

Korea Water Resources Development Corp. (K-Water) is officially taking over the 218-megawatt (MW) Angat hydroelectric power plant (HEPP) in Bulacan with the San Miguel group as its Philippine partner, said K-Water vice president for overseas business Byung Hoon Yune.

“The operation and maintenance by K-Water shall start by the end of this year,” Yune said at the sidelines of a ceremonial contract signing for the power facility. Three years ago, the Korean firm won the bid to operate the facility fueled by water from Angat dam in Bulacan. With an offer of $440.88 million, K-Water bested San Miguel and four other firms.

As it forges the partnership with San Miguel, state-owned K-Water is set to get a $500-million bridge loan to cover immediate financial commitments for Angat. It will then start project financing tapping Korean and Philippine banks, Yune said.

“The Korean EximBank (Export-Import Bank of Korea) and some Philippine banks will be engaged,” Yune said.

Standard Chartered is K-Water’s financial adviser.

Last Aug. 23, K-Water signed a memorandum of agreement with the San Miguel group.

“In 91 days we expect to close our deal,” Yune said. “We have to sign the shareholders agreement and share purchase agreement.”

Later, the partners will set up a special purpose company (SPC) in which San Miguel will have 60 percent equity as Philippine partner.

“San Miguel and maybe other Filipino investors will get the 60 percent of SPC [while] K-Water will get the 40-percent equity,” Yune said. The participation of other Filipino companies will depend on discussions with both K-Water and San Miguel.

K-Water will lend its technical expertise in operation and maintenance, while San Miguel will lead the local management for the Angat plant.

State-run Power Sector Assets and Liabilities Management (PSALM) Corp., said via e-mail that it “looks to close soon the sale” of the Angat facility following the issuance of certificate of effectivity of the asset purchase agreement to K-Water. The agreement serves as the contract governing the sale of the power facility to K-Water.