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The consortium led by the Aboitiz Group that won the
bidding for the Ambuklao-Binga hydroelectric power plants in a
state-auction has secured a multi-million dollar loan from the
International Finance Corp. to pay for the acquisition.
SNAP Hydro, Inc., the consortium
of Aboitiz Power Corp. (AP) and SN Power Invest AS of Norway,
recently inked a $100-million loan from the IFC, the World Bank’s
private sector unit.
The IFC loan will be used in
parallel with additional financing from Nordic Investment Bank and
local banks amounting to $60 million and $200 million, respectively.
The loans were granted primarily to support the privatization of the
75-megawatt Ambuklao and 100-megawatt Binga plants in the Benguet
province.
Apart from funding the
acquisition of the plants, which will be turned over to SNAP hydro
by June, the loans will also finance the rehabilitation of the
Ambuklao-Binga plants.
The planned rehabilitation will
re-commission the Ambuklao plant, which has been shut down due to
silt problems, upgrade the Binga plant and increase the plants’
combined capacity by 50 megawatts.
In light of this, total project
cost for the Ambuklao-Binga complex is projected to increase to $560
million. The SNAP Hydro will raise the remaining amount not covered
by its loans through equity and internally generated cash flow.
The facilities went for $325
million in a government auction conducted by the Power Sector Assets
and Liabilities Management Corp. (PSALM) as part of the
privatization program under a comprehensive sector reform law, the
Electric Power Industry Reform Act (EPIRA). SNAP Hydro won the bid.
The asset purchase agreement for
the hydroelectric complex only requires the consortium to deliver at
least 40 percent of the purchase price as upfront payment, payable
on or before the closing date.
However, Jose Ibazeta, PSALM
president, had said he expected the consortium to pay the amount in
full, which would boost the asset management firm’s privatization
proceeds to $1.9 billion this year.
Earlier, AES Corp., the winning
bidder for the 600-megawatt Masinloc coal plant, paid the full
acquisition price of $930 million, while Suez-Tractebel, winning
bidder for the 600-megawatt Calaca coal plant, is also expected to
fully settle the acquisition price of $700 million.
As of December 2007, PSALM has
generated an estimated $500 million from the sale of state-owned
National Power Corp.’s power plants. Under the EPIRA, all proceeds
generated from the power privatization program will be used to
settle Napocor’s $7.2-billion debt.
Any remaining unpaid portion of
Napocor’s debts will then have to be shouldered by consumers
through the Universal Charge component of their electric bills.
AP’s shares at the Philippine
Stock Exchange closed lower yesterday at P5.0 from P5.1.
--Euan Paulo C. Añonuevo
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