SN Aboitiz Power gets $100-M IFC loan for rehab of Ambuklao-Binga complex

SN Aboitiz Power-Benguet Inc. (SNAPB) has secured a $100-million loan from the International Finance Corp. (IFC) for the rehabilitation of two recently acquired hydroelectric power plants.

SNAPB is a joint venture between Aboitiz Power Corp. and SN Power Invest AS of Norway, a global renewable energy company. Aboitiz Power is a subsidiary of Aboitiz Equity Ventures Inc., the holding and management firm of the Cebu-based Aboitiz Group, which is also involved in power distribution, transportation, logistics, banking and manufacturing.

The IFC loan will be used to acquire and install turbines and generators at the Ambuklao and Binga hydro facilities. Ambuklao’s three 25-megawatt (MW) generation units have not been functioning since 2000 and Binga’s four 25-MW generators operate merely as a base-load plant when the water level is high and as a peaking plant when the level is low.

The Ambuklao and Binga plants are part of the state-owned assets offered for sale to comply with the Electric Power Industry Reform Act (EPIRA).

The transaction is IFC’s second loan package to the Aboitiz Power-SN Power consortium after it extended financing for the bid for the 360-MW Magat hydro project in 2007.

In a statement, Aboitiz Power president and chief executive officer Erramon Aboitiz said that the Ambuklao-Binga acquisition forms part of the group’s strategic vision of positioning Aboitiz Power as the country’s leading provider of energy from renewable sources.

“We will continue prioritizing investments in renewables and pursuing our vision of making Cleanergy available to every Filipino,” Aboitiz said, adding that Cleanergy is the Aboitiz brand of energy sourced from clean and renewable sources.

The Aboitiz Power group is reportedly eyeing carbon credits for the plants under the Kyoto Protocol’s Clean Development Mechanism scheme, which got the nod of the IFC.

IFC’s resident representative for the Philippines Jesse Ang said as part of the Philippines’ efforts to develop renewable energy, “the transaction fits within the World Bank Group’s climate change strategy, which calls for increased investments in renewable energy,” Ang said.

As of June 2008, the IFC, the World Bank’s investment arm in the private sector, has invested roughly $898 million in 32 projects in the Philippines, which is ranked second among IFC’s exposures in the East Asia and Pacific Region.       — Ted Torres