CONSTRUCTION of the country’s first supercritical coal-fired power plant is already underway in Quezon and should start providing efficient and reliable baseload power supply by the first half of 2019.
San Buenaventura Power Ltd. (SBPL) is building a 500-MW (gross) supercritical coal-fired power plant in the town of Mauban in Quezon Province.
“The power plant will be the first in the country to use state-of-the art supercritical technology, which is more efficient than all [other]existing coal plants in the Philippines,” the company said.
Compared to subcritical power plants, supercritical coal-fired power plants operate at higher pressures, leading to higher efficiencies and significant reductions in emissions over the expected life of the plant.
The 500-MW power plant is being built by the consortium of South Korea’s Daelim Industrial Co. Ltd. and Japan’s Mitsubishi Corp., both experienced engineering, procurement and construction contractors.
SBPL is 51 percent owned by Meralco PowerGen Corporation (MGen) and 49 percent by New Growth B.V.
The electricity generated by SBPL’s plant will be sold to Meralco under a 20-year power supply agreement that was approved by the Energy Regulatory Commission (ERC) in May 2015.
The SBPL plant forms part of MGen’s goal to build a power generation portfolio of up to 3,000 MW as Meralco moves to be a major industry player not only in the distribution but also in the Philippines’ generation sector.
Meanwhile, SBPL was recently awarded the “Asia-Pacific Power Deal of the Year” award by the Thomson Reuters Project Finance International (PFI).
SBPL was recognized after it closed a landmark P42.15-billion funding, which is the Philippines’ largest all-peso project finance transaction to date.
The project finance was put together by a consortium of Philippine financial institutions. In the past, similar deals would require support from foreign banks or multilateral export credit agencies due to the local banks’ limitation on debt size and tenor.
The senior-term loan lenders are BDO Unibank, Inc.; China Banking Corp. (Chinabank); Metropolitan Bank & Trust Co. (Metrobank); Philippine National Bank (PNB); and Rizal Commercial Banking Corp.
BDO Unibank’s Trust and Investments Group served as the loan facility agent while Metrobank’s Trust Banking Group acted as collateral trustee.
BDO Capital & Investment Corp. and First Metro Investment Corp. were appointed as joint bookrunners and joint issue coordinators. Together with Chinabank, PNB Capital and Investment Corp. and RCBC Capital Corp., they also acted as joint lead arrangers for the transaction.
The project finance has a tenor of 15 years, which is the longest maturity that Philippine banks can provide. It has no corporate or government guarantee even with the sizeable amount but SBPL is backed by Meralco and Thailand’s Electricity Generating Public Co. Ltd. (EGCO).
MGen is a wholly owned subsidiary of Meralco, the Philippines’ largest electricity distributor, while New Growth B.V. is a wholly owned subsidiary of the EGCO Group, a regional utility with over 3,800 MW of operational and 1,800 MW power plants in construction throughout Southeast Asia.