Napocor and PSALM last week signed the acknowledgment and consent agreement (ACA) which will allow the State Power Development Corp. (SPDC), the operator of the project, to push through with the 200 MW coal facility project inside the Philippine Veterans Investment Development Corp. (Phividec) Industrial Estate in Mindanao.
The project will be 70-percent funded through loan and 30-percent equity.
Among the lenders of SPDC include: Japan Bank for International Cooperation (JBIC), Nippon Export and Investment Insurance Corp. (NEXI), Kreditanstalt fur Wiederaufbau (Kfw), Bayerische Hypo-und Vereinsbank AG, and Dresdner Bank AG.
The government has started negotiations with SPDC, composed of stakeholders State Investment Trust Inc. (SITI) and Harbin Power Engineering Co.– in June 1998 but the purchase power agreement (PPA) with Napocor took effect in March 2001.
MCPP is included in the list of independent power producer (IPP) contracts of Napocor that are being re-evaluated and renegotiated by PSALM.
Based on the PPA signed by Napocor and SPDC, the state-owned power firm does not guarantee a minimum off-take under the PPA but will endeavor to dispatch the plant at 80 percent of the plant’s capacity. If Napocor dispatches the plant at less than 45 percent, SPDC has the right to shutdown the plant while continuing to receive capacity payments based on the PPA provisions.
After the financial close, A Germany-based power giant STEAG Ag will buy about 89-percent stake in the SPDC. The remaining 11 percent of the company will be owned by SITI. Harbin Engineering, on the other hand, will apparently divest its share in SPDC.
STEAG is a leading German IPP company which ranks among the top five German power companies in terms of capacity and power generation operating about 5,500 MW, most of which are coal-fired. STEAG is wholly-owned by RAG Ag, one of the world’s largest coal companies.
Napocor sources said the entry of STEAG into SPDC is part of its active international expansion and diversification strategy. At present, STEAG owns and operates a 150 MW power plant in Colombia and is currently constructing a 1,210 MW power facility in Turkey.