Metrobank power unit gets P14-billion loan

MANILA, Philippines - Panay Energy Development Corp. has tapped a consortium of financial institutions for a P14-billion loan package to partly finance its P22-billion coal-fired power plant in La Paz, Iloilo City.

Panay Energy is a subsidiary of Global Business Power Corp., the energy arm of the Metrobank Group of Companies.

The P14-billion loan package facility drew a minimum P1 billion each from Allied Banking Corp., Bank of the Philippine Islands, China Banking Corp., Land Bank of the Philippines, Metropolitan Bank and Trust Co., Philippine National Bank, Philippine American Life and General Insurance Co. (Philamlife), Rizal Commercial Banking Corp., and Union Bank of the Philippines. First Metro Investment Corp. (FMIC), the investment banking arm of the Metrobank Group, was the sole arranger of the loan package.

At the formal signing of the loan facility yesterday, FMIC president Francisco C. Sebastian said the 164-megawatt Panay Energy project financing marks the last of major financing for power-related projects.

“It is one of the last pieces for the year,” Sebastian said, adding that major clean and renewable energy sources are now being studied seriously. Clean energy sources are relatively expensive at the initial stages, requiring among others long periods of studies and surveys, not to mention economical capacities.

FMIC was part of the financial package that funded the 40-MW wind power farm in Pagudpud in Ilocos Norte of the Lopez-owned Energy Development Corp. (EDC).

The indicative pricing rate for the loan facility is 9.5 percent to 10.25 percent with a repayment term of 12 years.

“The first drawdown will be in late March, and it may initiate monthly drawdowns depending on the progress of the project,” Arsenio Kenneth M. Ona, FMIC vice president for investment banking group, said.

Formosa Heavy Industries will undertake the engineering design, procurement and construction of the power plant, which is targeted to be operational by end-2010.

The Panay Energy coal-fired plant complements Global Business Power Corp.’s existing 109.5-MW diesel plant in Panay Island. The new power plant is envisioned to help solve the power shortfall in the Panay, as well as in the Visayas region.

The loan facility is considered another breakthrough for project financing in the energy sector, as this is the second largest peso-denominated project loan facility to be purely funded by local institutions.

The P16-billion loan facility of the Cebu Energy Development Corp. – another Global Business Power Unit in Toledo City, Cebu, is the biggest so far.