Metrobank unit gets P16 billion for power project

MANILA, Philippines - Cebu Energy Development Corp. (CEDC), a power development arm of Metropolitan Bank and Trust Co. (Metrobank), has secured a P16-billion loan to partially finance its P22-billion clean coal power plant project in Toledo, Cebu.

This is considered the largest peso-denominated project financing in the Philippines.

The loan, arranged by sister investment bank First Metro Investment Corp., will be provided by 11 banks and insurance companies. The loan will mature in 12 years.

The 246-megawatt (MW) power plant project is a major step forward in the company’s goal to alleviate the power situation in the Visayas.

CEDC is a joint venture among Global Business Power Corp. of the Metrobank Group, Aboitiz Power, Vivant Corp., and Formosa Heavy Industries of Taiwan.

The Cebu energy project also gives a much-needed shot in the arm to the economic stimulus initiative of Department of Trade & Industry Secretary Peter Favila.  The stimulus package calls for the private sector to contribute P100 billion to pump-prime the economy.

”The new power plant is also CEDC’s response to President Gloria Macapagal-Arroyo’s calls for the expansion of power generation capacity, particularly in Cebu and the Visayas,” CEDC president Jesus Alcordo said.

CEDC claims that construction of the plant is well underway.  It is about 50 percent complete into the first of three power generation units.

The unit is scheduled to be energized by the first quarter of 2010, with full commercial operation expected in the third quarter of 2010 – the time the power situation in Cebu and the Visayas moves from critical to an actual shortage.

The Visayas region has been facing dwindling power reserves and insufficient peak capacity as early as 2008. 

The new coal plant will be using the latest in “clean coal” technology and is being built by Formosa Heavy Industries (FHI) of Taiwan.

FHI itself has a portfolio of modern, efficient and clean coal-fired power plants in Taiwan, the United States, Indonesia and the Philippines.

“The Cebu economy has been growing strongly, with corresponding demand for energy.  CEDC’s plant is expected to come online in time to avert a true power crisis,” Alcordo said.

The plant is anticipated to supply the Balamban EnerZone where Tsuneishi’s shipbuilding plant is being expanded, requiring not only more power but also reliable and quality energy.

Carmen Copper Corp., which is now fully operational in the old Atlas Mining site, will also be a major beneficiary and is projected to create a tremendous multiplier effect as an economic stimulus project.