PetroEnergy inks P2.4-billion loan for power project

MANILA, Philippines - PetroEnergy Resources Corp. has signed a P2.4-billion long-term loan facility to finance a power project by subsidiary Maibarara Geothermal Inc. (MGI).

In its disclosure to the Philippine Stock Exchange, PetroEnergy said the loan will specifically be used for the construction of the 20-megawatt Maibarara geothermal power project, the first renewable energy project under the 2008 Renewable Energy (RE) Law.

MGI is 65 percent owned by PetroEnergy’s PetroGreen Energy Corp., 25 percent by Trans-Asia Oil and 10 percent by PNOC-Renewables Corp.

MGI holds the Department of Energy (DOE) service contract for the Maibarara geothermal field in Sto. Tomas, Batangas.

The 10-year loan would be provided by Rizal Commercial Banking Corp. (RCBC) and Bank of the Philippine Islands (BPI). RCBC Capital is loan issue manager and lead arranger, BPI Capital is joint lead arranger, and RCBC Trust is loan facility agent, security trustee, and accounts trustee.

The loan will be used to fund the construction of the steamfield pipeline system, the power plant, and related transmission connection.

The 20-MW geothermal facility is intended to be put into commercial operation by late 2013.

 “The 20-MW Maibarara geothermal project holds the distinction of being the first renewable energy project fully initiated under the 2008 Renewable Energy Law and the first geothermal service contract awarded during the 2009 DOE bidding round to reach this milestone of financial closing,” Energy Undersecretary Jay Layug said.

He also said the participation of two of the country’s top commercial banks testifies not only to the public-private partnership nature of the Maibarara geothermal power project but also to the investment and growth potential of the country’s RE industry.

 “MGI is proud to have RCBC and BPI as part of its growing network of partners in the Maibarara geothermal power project,” MGI president Francisco G. Delfin Jr. said, adding that the loan demonstrates lenders’ belief in the commercial viability of the project as well as their regard for MGI’s technical, managerial, and corporate strengths.