THE Development Bank of the Philippines (DBP) is eyeing to finance 32 power projects worth P89 billion this year up to 2016.
DBP Senior Vice President and Credit Risk Management Group Head Auralyn S. Torres said the DBP targets to finance 32 power projects with potential capacity of 1,009 megawatts (MW).
“The DBP is evaluating the 32 power projects, which are subject to technical due diligence. Hopefully, we can approve their loans this year until 2016,” she told the BusinessMirror.
DBP Risk Management Manager Jerome de Leon said the 32 pending projects have an aggregate project cost of around P89 billion.
The DBP seeks to finance the two brownfield projects owned by Green Core Geothermal under the Lopez Group with aggregate generation capacity of 304.5 MW.
Other projects in the list are two coal plant of Filinvest and Therma South with aggregate generation capacity of 435 MW at a total cost of P40.03 billion; and the 400-MW LNG project of Energy World Corp. worth P25.87 billion.
The DBP does necessarily have to finance the entire project. The loan amount may be lower than the project cost.
The hydropower projects account for 20 out of the 32 projects, while the rest were coal (two), natural gas (one), solar (three), biomass (three) and oil (three).
These 32 projects were among the 858 power projects identified by the Department of Energy (DOE) with potential capacity of 29,462 MW.
“The list of the 32 pending projects being eyed by DBP constitutes 3.42 percent of the total potential capacity in the project lists of the DOE as of March 2015,” Torres said.
She added that the DBP, a development bank, is willing to finance these projects. However, there are challenges being faced that cause delays, notably in regulatory issuances, as these projects require approval from the Energy Regulatory Commission. An investor also needs to get approval from the local government units that are directly affected, especially on coal projects.
She said the DBP’s interest rates were very competitive, and it can offer long-term loans from seven to 12 years.
“The power sector has the second biggest share in the DBP’s total loan portfolio of P160 billion, as of March 2015,” she said.
Citing the Bangko Sentral ng Pilipinas figures, the total outstanding loans to power sector of the banking sector is P446 billion, as of March 2015. She said the DBP has 2.7-percent market share in total loans to power sector.
The DBP has approved 10 power project loans in the past, while 32 projects were in the pipeline, for a total of 42 projects.
Of the 42 projects, 13 were in Luzon, six in Oriental Mindoro, one in Romblon, nine in the Visayas and 13 in Mindanao.
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Must read for DBP Credit Risk Management Group.
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