Hydroelectric Development Corp. (Hedcor) is set to sign a loan with three banks this month for the development of the 42-megawatt (MW) Sibulan hydroelectric power plant in Davao.

Hedcor, a subsidiary of Aboitiz Power Corp. (APC), will sign a P3.6-billion loan agreement with Metrobank, Philippine National Bank and Rizal Commercial Bank Corp. on May 21. It said the loan accord will have a period of 12 years.

In July last year, APC said it has been in talks with several local banks to help finance its 42-MW Sibulan and 30-MW Tamugan hydroelectric-power projects.

Aboitiz said the two projects will be financed using internally generated fund and loans from local banks.

Though the construction of the Sibulan and Tamugan project will entail about P5 billion and about P4 billion, respectively, the amount the banks will possibly lend them is still under discussion. The company said it is looking at getting a longer-term loan from the banks.

The Sibulan project, which will generate power from the Sibulan River, will include the construction of the two power plants, access roads and transmission lines and is designed to operate for 25 years.

Tamugan includes the construction of three power plants, weirs and impounding basins and a diversion tunnel that will divert some of the water from Talomo to Tamugan River.

These projects will be undertaken to ensure adequate power supply in the area.

“We target to have the groundbreaking for the Sibulan next month, after having secured all the necessary permits, while the groundbreaking for the Tamugan is set for next year. The output of the two power plants will be sold to distribution utilities in the Davao area that will include Davao Light and Power Corp.,” Aboitiz said.

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