After having to receive the certificate of effectivity for the Angat hydroelectric power plant (HEPP), Korea Water Resources Development Corp. (K-Water) said it may still take three months before it can finally close its deal with joint venture partner San Miguel Corp. (SMC).
Listed SMC earlier confirmed that its board indeed has authorized its management to discuss, negotiate and to enter into a joint venture with K-Water, the leading water resources and power firm in South Korea, for the turnover of 218-megawatt component of Angat HEPP.
“This time, we just signed MoA [memorandum of agreement with SMC]. In 91 days, we have to sign the shareholders agreement and share purchase agreement. In that case, we can close the deal,” Byung Hoon Yune, K-Water vice president for Overseas Business Division, said in an interview with reporters.
He said that it is only after three months where both parties can establish a special purpose company for Angat facility.
Byung Hoon Yune specified that “technically,” K-Water will be in charge of the operation and maintenance of the plant, while SMC will take part on the management.
He further said that the company is planning to initially tap a $500-million worth of bridge loan for the project.
“Because we don’t have much time, we have to borrow money as a bridge loan for one year and after that we will start project financing with Korean and Filipino banks.
In General, the K-Water official specified that “the real operation and maintenance” of the Angat plant shall start by the end of this year, adding that the Korean firm should still have to “survey and investigate” the detailed status of the dam before it can identify the budget for the rehabilitation.
“After that we shall decide what amount should be invested by K-Water with the cooperation of Psalm [Power Sector Assets and Liabilities Management Corp.] and Filipino government,” he said.
Psalm issued the Angat HEPP certificate of effectivity to K-Water late Monday.
Meanwhile, Byung Hoon Yune also indicated that the firm is interested in other power assets in the Philippines.
“The reason why we try to enter the Philippines, especially hydropower market, is because we think that the Philippines has a huge investment chances for Korean company like K-Water. So we can invest a lot more to hydropower side. Also we can find to find out the business chance in the water supply,” he said.
Madelaine B. Miraflor