Lenders pool $525M for 330-MW power plant in Zambales

A consortium of banks led by Bank of the Philippine Islands (BPI) has pooled $525 million in funds to partly finance a new 330-megawatt (MW) coal power plant being developed by the local unit of American power firm AES Corp. in Zambales.

This was described as a “super critical” coal power plant which was envisioned to supply power to, among others, at least seven electric cooperatives in northern Philippines for 20 years. The plant, scheduled for completion in 2019, is expected to result in the reduction of electricity rates in the area.

The credit facility to AES Philippines follows a $500-million refinancing in 2013—also provided entirely by local banks—in support of the rehabilitation and modernization of the 600-MW facility in Masinloc, Zambales.

“We are happy to enable private sector operators such as AES Philippines to play a bigger role in delivering high-quality energy installations to address the increasing demand for electricity in the country,” said Reginaldo Cariaso, officer in charge and managing director of BPI Capital Corp. which served as sole issue coordinator and one of the joint lead arrangers for the transaction.

In a statement, the BPI group said this transaction underscored the banking group’s commitment to “finance and pursue projects that create a strong impact on sectors that are vital to the country’s economic growth.”

The other lead arrangers for this deal are SB Capital Investment Corp., RCBC Capital Corp., and PNB Capital Corp.

AES Philippines is 50.55 percent owned by US-based AES Corp., a leading American global power developer and operator, while 41.35 percent is held by independent power producer Electricity Generating Public Co. Ltd. (EGCO) Group of Thailand and 8.10 percent by International Finance Corp., the private sector funding arm of the World Bank.

The existing 600-MW power plant in Masinloc, Zambales is considered one of the largest base-load clean-coal power plants in the Philippines.