THE Manila Electric Co. (Meralco) has received offers from four interested firms willing to take in a minority stake in an ambitious coal-power project costing P135 billion.
“Yes, Meralco has taken proposals,” said Meralco Chairman Manuel V. Pangilinan. “There’s a final list of four interested firms that are a mix of local and foreign. Pangilinan said only one would be chosen.
Meralco, through its power-generation arm, will construct a 2×600-megawatt (MW) ultra-supercritical coal-fired power plant in Atimonan town, Quezon Province. The project, which is going to be the country’s first ultra-supercritical plant, will be undertaken by Atimonan One Energy Inc.
Pangilinan said his group would keep a majority stake in the power project and sell only up to 49 percent to the prospective investor.
“Up to 49 percent. There’s no decision what will be the exact percentage. Meralco will keep at least 51 percent. I think it depends on the final decision on how much we will own for Atimonan. Definitely not lower than 51 percent. We will not sell control,” he said.
Pangilinan added discussions are moving, though no specific timetable has been set as to when the power firm can decide which of the four will be chosen. He did not identify the interested firms.
The company, meanwhile, expects to finalize within the second quarter of this year a P100-billion loan with eight banks to finance a huge portion of the project cost. “My recollection is that the total project cost would be in the order of P135 billion. The projected debt level is about 70 percent of that, so it would be anywhere between P90 million and P100 billion. About 75 percent of that cost is P100 billion. The balance of P35 billion will be equity.
Meralco Senior Vice President and CFO Betty Siy-Yap said the loan component is “the largest project finance because the last largest was San Buenaventura at P42 billion.”
She did not name the banks, saying the company has yet to sign a mandate letter.
“We haven’t mandated yet. We’re still going through the process,” Yap said. Meralco President Oscar Reyes said the financing scheme would involve the participation of eight banks and a financial closure could happen within this quarter.
“We will take about eight banks,” he said.
Site-preparation works for the power project are targeted to start in mid-2017, with expected completion of Unit 1 in 2021.
Atimonan One is currently in the final stages of its selection and contract documentation process for an EPC (engineering, procurement, construction) contractor.
“We are evaluating bids we received from three international reputable EPC contractors,” said Angelito Lantin, senior vice president of Meralco PowerGen, the power-generation arm of Meralco.
It signed in April last year a 20-year power-supply agreement (PSA) with Meralco for the full output of the plant, and filed with the Energy Regulatory Commission (ERC) for its final approval.
It has already secured the necessary permits from the Department of Environment and Natural Resources and the National Commission on Indigenous Peoples. Likewise, a certificate of land-use conversion for the resettlement site was issued.
“We completed the resettlement site for affected families. There are about 70 families who used to reside on the location of the plant site. We resettled about 50 of these families,” said Lantin, who added the turnover of resettlement housing for the affected families was completed on March 8.