Trans-Asia allots P1.5 B for share of coal power plant project

MANILA, Philippines - Trans-Asia Oil and Energy Development Corp. of the Phinma Group is pouring in P1.5 billion in South Luzon Thermal Energy Corp. (SLTEC), its joint venture with conglomerate Ayala Corp.

In a disclosure to the Philippine Stock Exchange (PSE) yesterday, Trans-Asia said the money would be used to finance the construction of the second unit of SLTEC’s 135-megawatt thermal plant in Calaca, Batangas which has an estimated cost of at least P10 billion.

Ayala will also pour in P1.5 billion, bringing the equity portion of the investment of both Trans-Asia and Ayala to P3 billion.

The rest would come from debt, Trans-Asia president Francisco Viray said.

The two companies signed the joint venture agreement in 2011 to jointly develop and operate the 135-megawatt coal power plant in Calaca.

Ayala Corp. and Trans-Asia agreed to incorporate a joint venture company, SLTEC., equally owned by them and which had an initial capitalization of P200 million.

The proponents are optimistic on the business prospects of the plant because of the open access regime, which would soon be in place.

Under the so-called open access scheme, large power users will be able to choose their own suppliers, in contrast with the current system where they are limited to the supplier that has jurisdiction over their areas.

Mandated under the Electric Power Industry Reform Act, open access is expected to spur competition among players.

Trans-Asia earlier tapped BDO Capital and Investments Corp. as the lead arranger of a P8.75-billion loan to fund at least 70 percent of the plant.