Meralco-led RP Energy to raise P40 billion for power generation projects

MANILA, Philippines - Redondo Peninsula Energy Inc.(RP Energy), the consortium composed of Manila Electric Co. (Meralco) Power Generation Corp., Aboitiz Power Corp. and Taiwan Cogeneration International Corp., is planning to raise P40 billion early next year to finance its power projects.

Meralco senior executive vice president and chief operating officer Oscar Reyes said about half, or P20 billion, of the entire borrowing requirement would be Meralco PowerGen’s share.

“We have to raise it as part of Meralco PowerGen’s share in the consortium. We may not use it fully but we have to arrange for this in the first half of 2012,” he said.

Reyes said they are now holding talks with a group of banks for a possible syndicated loan.

In addition, he said Meralco itself would be raising another P3 billion in the first quarter of the year for its own operating expenses, mostly for electric power projects.

“We want to have a ready fund for our capital expenditure program to make sure we have the financing as need arises,” he said.

Reyes said the company would be needing at least P10 billion for its capital expenses next year.

The company earlier established Meralco PowerGen in its bid to reduce its rates and secure its electricity supply.

Under current regulations, distributors like Meralco can source electricity from its own power plants provided they do not exceed more than half of their total requirements.

Meralco PowerGen’s first project is a 600-megawatt coal plant in Subic, which is targeted to start commercial operations in 2014.

Reyes said they have already secured an environmental compliance certificate for the first phase of the project.

Meralco PowerGen plans to put up several more power plants across the country to further boost the company’s portfolio.

The company is currently open to all potential sites in Luzon for its generating plants, which would help improve the island’s power supply amid a projected shortfall within the next five years.