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MASINLOC,
Zambales—The US-based AES Corp. on Wednesday took over
the operations of the 660-megawatt (MW) Masinloc
coal-fired thermal power plant in barangay Bula in
Zambales.
On April
15 AES paid the Power Sector Assets and Liabilities
Management Corp. (PSALM) $930 million for the purchase
and transfer of the Masinloc plant.
Paul
Hanrahan, AES president and chief executive, said the
acquisition is a “key component of our strategy to
invest in areas where there is a significant need for
new capacity, and offers AES an excellent entry point
into the growing Philippine economy through one of the
lowest-cost thermal plants in the system.”
Hanrahan
added that Masinloc is an attractive investment because
the existing facility has infrastructure in place to
allow AES to add an additional 600 MW of generation
capacity.
“We have
gone through similar acquisitions in other parts of the
world, and we expect to improve the overall efficiency
and output of the existing plant, providing more
reliable energy to the Philippine market,” Hanrahan
said.
AES and
its 8-percent minority partner International Finance
Corp. (IFC) paid 100 percent of the purchase price
up-front to complete the Masinloc transaction in one
step. Including transaction costs and completion of a
planned upgrade program to improve environmental and
operational performance, the total project cost is
estimated at $1,057 million.
The
transaction funding included $635 million in secured
nonrecourse financing: composed of a $240- million,
18-year facility from IFC; a $200-million, 15-year
facility from Asian Development Bank; and a
$195-million, 10-year facility from a consortium of
banks, including ING Bank, Security Bank, Bank of the
Philippine Islands and Rizal Commercial Banking Corp.
In addition, over $30 million of unsecured working
capital facility commitments have been obtained from
three local banks.
“The
impressive local and international group of commercial
and multilateral lenders reflects not only the strong
fundamentals of the project but also demonstrates the
strength of the project finance market in Asia,” said
Mark Woodruff, executive vice president and president of
AES’s
Asia and
Middle East region. |
