PANAY Energy Development Corp. (PEDC) has obtained an P11 billion loan to fund the construction of a 150-megawatt coal-fired power plant project in Iloilo City, a company official said on Wednesday.
Jaime Azurin said the amount was a 12-year syndicated loan from a consortium of local financing institutions.
“We are truly honored for gaining the confidence and support of like-minded financing institutions that serve as our reliable partners in fueling economic development in the Visayas, particularly in Panay,” said Azurin, executive vice president of Global Business Power Corp. PEDC is wholly-owned subsidiary of GBP.
The consortium is composed of the Bank of the Philippine Islands, China Banking Corp., Land Bank of the Philippines, Rizal Commercial Banking Corp., Philippine National Bank and the Philippine American Life and General Insurance Co.
First Metro Investment Corp was the lead arranger of the loan. PEDC’s P11 billion loan requirement was oversubscribed by P3.6 billion.
Proceeds of the loan represented 70 percent of the P15.6 billion total project cost. The remaining 30 percent was financed through equity.
Azurin said GBP obtained four loans in a span of six years and the syndicated loan would play a significant role in revitalizing Panay’s economy.
“The P11 billion funding couldn’t have come at a more opportune time as tight power supply is anticipated due to the accelerated business developments in Panay, especially in the areas of property development and tourism industries,” he Azurin.
The funding resulted in additional power supply in 2011 with the operation of Panay Energy’s two units of 82-MW clean coal plant facilities in Iloilo and Cebu Energy’s three units of 82 MW power plant in Toledo, Cebu.
In 2014, GBP’s latest 82 MW expansion project under Toledo Power Company began serving the additional power requirements of major industries in Toledo, which include Carmen Copper Corporation, Balamban Enerzone and CEBECO III.
Once Panay Energy’s 150 MW expansion project becomes operational by June 2016, Panay Energy will become the largest power generating facility in the Visayas.
Panay Energy was established in 2009 out of the need for adequate, reliable and cost efficient power supply in Panay island.
More than reducing the price of electricity in Iloilo by as much as P3 per kwh, Panay Energy serves the baseload power requirements of Panay, including the island of Boracay.
It has likewise lessened dependence on submarine cables which has significantly improved power supply efficiency.
Dramatic development in Panay became evident as soon as power supply stabilized.
Iloilo started to witness the establishment of shopping centers, Iloilo International airport, hotels, infrastructure projects and emergence of business process outsourcing (BPO).
With the resurgence of investor confidence, Panay Energy is currently constructing its 150 MW expansion project in order to support the rapid business developments in Iloilo City and the rest of Panay island.
Ongoing major businesses and property developments in Iloilo include the 75-hectare Iloilo Business Park of Megaworld Corporation, the 20-hectare Atria Park District of Ayala Land, the 20-hectare Gaisano Business Center and the high rise commercial and residential condominiums of Double Dragon Properties.