MANILA, Philippines—The Palm Concepcion Power Corp., a subsidiary of publicly listed A Brown Co. Inc., is tapping BDO Capital to arrange the debt-financing requirements for its proposed 200-megawatt coal-fired power plant on Panay Island.
Based on a disclosure to the Philippine Stock Exchange, Palm Concepcion has already secured the commitment of the bank for the project, causing the Department of Energy (DoE) to reclassify the project as “committed” rather than indicative. The financial closure for the power project, estimated to cost P10 billion for the first phase of 100 MW, is expected by July 2012.
“So as not to cause any delay in your negotiation with BDO and, consequently, in the project implementation, we hereby list your project as committed in the 2012 list of power projects. However, the project’s financial closing should conclude before the finalization of the 2012 power development plant and transmission development plan by 2012. Otherwise, we will reclassify back your project to indicative,” the DoE said in a letter to Palm Concepcion.
The DoE letter explained that it wanted the company to push through with the power project “in view of the capacity gap in the Visayas by 2015.”
“We are looking at this project to provide the required capacities by 2015, given that the target commissioning of your project (will be) by the third quarter of 2015 for Phase 1 and November 2016 for Phase 2,” the DoE said.
A Brown is the holding company of the Brown Group of Companies primarily engaged in the business of real estate development, oil palm plantation development and milling and is now starting to venture into the utilities sector particularly in power.
In 2010, A Brown formed two subsidiaries, Palm Thermal Consolidated Holdings Corp. and Panay Consolidated Holdings Corp., to handle the purchase of the proposed power plant.
After its acquisition of the power company, which would implement the proposed Concepcion coal-fired power plant, it was renamed Palm Concepcion Power Corp. in 2011 as the vehicle for the company’s entry in the power-generation business.