A. Brown unit secures financing commitment for coal power plant proj

MANILA, Philippines - Listed holding firm A. Brown Co. Inc. said yesterday its subsidiary has secured financing for a 200-megawatt (MW) power project in Western Visayas.

The development prompted the Department of Energy (DOE) to upgrade the coal-fired power plant to “committed” stage or a step closer to construction.

In a disclosure yesterday, A. Brown – the investment arm of businessman Walter W. Brown – said it informed the DOE that BDO Capital and Investment Corp. will arrange the debt financing requirements for the project.

In July, A. Brown announced it will spend $200 million or roughly P8.5 billion for the 200-MW clean coal-fired power plant of subsidiary Palm Concepcion Power Corp. in the municipality of Concepcion in Iloilo.

A. Brown said the target financial closure with BDO Capital is in the second quarter.

However, the power firm told the DOE early last month that the debt financing of the project is subject to the DOE’s reclassification to “committed” from “indicative.”

“So as not to cause any delay in your negotiation with BDO Capital and consequently, in the project implementation, we hereby list your project as ‘committed’ in the 2012 list of power projects,” the DOE said in a letter to Palm Concepcion Power.

The coal-fired power plant, which will be commissioned in the third quarter of 2015 for phase one and fourth quarter of 2016 for phase two, will supply the power needs of the Visayas grid.

Under the Philippine Power Development Program 2010-2030, the Visayas grid needs 2,150 MW in new capacity but only 654 MW is already committed and 186 MW is still indicative.

In “committed” power projects, the proponents have already complied with necessary permits and clearances of various agencies and are in the process of financial closing.

Meanwhile, “indicative” power projects are those under different stages of project development like feasibility study, which is prior to financial closing.

In November 2010, A. Brown, through subsidiaries Palm Thermal Consolidated Holdings Corp. and Panay Consolidated Holdings Corp., bought DMCI Power Corp.’s planned 100-megawatt coal-fired power plant in Iloilo.