Kepco-SPC gets BSP okay to borrow $270 million

MANILA, Philippines - KEPCO-SPC Power Corp. (KSPC) has been given the greenlight by the Bangko Sentral ng Pilipinas (BSP) to borrow $270 million from international lenders to bankroll the establishment of two coal-fired power plants in Naga City, Cebu.

BSP officer-in-charge Diwa Guinigundo told reporters that the central bank’s Monetary Board (MB) has approved the plan of KSPC to borrow from Export-Import Bank of Korea, Asian Development Bank (ADB), and other lenders.

Guinigundo said KSPC plans to borrow $100 million from Korea Eximbank, another $100 million from ADB, and $70 million from a syndicate of lenders to be guaranteed by Korea Eximbank.

Proceeds of the borrowing would be used to finance the development, construction, and management of 200-megawatt power plant complex worth $451 million in Naga City in Cebu.

About 70 percent of the total project cost would be sourced from loans while the remaining 30 percent would be financed through existing shareholders’ equity.

KSPC is a joint venture between the Korean firm and the local SPC Power. The plant would be established in a 8.4-hectare area and would consist of two 100-MW coal-fired power plants.

Guinigundo said the loans have a term of 12 years inclusive of a 21-month grace period with interest rates of 4.5092 percent to Korea Eximbank, 4.5632 percent to ADB, and 5.177 percent for the other lenders.

According to him, the approval of the loan was very timely in order to address the growing demand for electricity in Cebu and at the same time prevent rotating brownouts in the area due to lower supply caused by the El Niño.

The first plant with a capacity of 100-MW would be commissioned by February 2011 and would be doubled to 200-MW with the commission of the second plant by May 2011.