Coal news and updates

MGen, partners seek syndicated bank loan for two coal projects in the Philippines

MERALCO PowerGen Corp. (MGen) and its partners plan to raise close to P100 billion to fund two power projects that are expected to move forward this year.
These projects involve San Buenaventura Power Ltd. Co. (SBPL)’s 455-MW coal plant in Mauban, Quezon and a 600-MW coal plant of Redondo Peninsula Energy, Inc. (RP Energy) in Subic, Zambales.

These companies are planning to secure debts and achieve financial closing for the projects this year, said Oscar S. Reyes, president of MGen’s parent firm Manila Electric Co. (Meralco).

Mr. Reyes said SBPL -- a joint venture between MGen and New Growth B.V. -- will obtain a P40-billion funding from local banks.

“We are looking at a syndicated long-term bank loan. We are hoping to close that within the third quarter,” he said in a briefing after the company’s annual stockholders’ meeting in Pasig City.

On the other hand, Mr. Reyes said RP Energy’s funding “will be higher than P40 billion because it’s 600 MW while the other one is 455 MW. So it will be bigger.”

RP Energy is a joint venture among MGen, Aboitiz Power Corp. and Taiwan Cogeneration Corp.

Asked on the total funding MGen and its partners target to obtain for the projects, Mr. Reyes said: “Maybe short of P100 billion.”

Mr. Reyes noted that financial closing takes time because “banks would like to lend when there’s an assured market” or buyer of the electricity generated by the power plant.

At the same time, it is also necessary to sign an engineering, procurement and construction contract prior to financial closing.

Mr. Reyes said both SBPL and RP Energy are targeting to finish all these activities this year to be able to move forward with the construction stage.

Both plants are slated to start commercial operations in early 2019.

Besides these two projects, MGen is also working on another coal project: the 1,200-MW Atimonan plant in Quezon.

The company is also in talks with Japanese firms for a potential 1,500-MW liquefied natural gas (LNG) project.

“We were approached by Osaka Gas and Mitsui, which brought up an idea for an LNG terminal and power plant in Bataan,” Mr. Reyes said.

The official, however, that the partnership has yet to be sealed and both parties are still determining the feasibility of doing the project.

“We still have to continue further discussions and preparations for a feasibility study,” he noted.

MGen aims to build a sizable power generation portfolio. The company is currently also part of Global Business Power Corp. (GBPC) through its 22% interest.

GBPC is one of the largest independent power producers in the Visayas region.

MGen has also ventured abroad in partnership with First Pacific Co. Ltd.

The two have incorporated PacificLight Power Pte. Ltd., which holds a 70% stake in GMR Energy Singapore Pte. Ltd. -- the owner of an 800-MW natural gas power plant in Jurong Island, Singapore.

MGen’s parent company, Meralco, is the Philippines’ largest power distributor with over five million customers.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by Philippine Long Distance Telephone Co. (PLDT).

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld.

source: http://www.bworldonline.com