(EnergyAsia, April 21, Monday) — NYSE-listed AES Corporation said it has completed the $930 million purchase and transfer of assets of the 660 MW Masinloc coal-fired thermal power plant on Luzon Island in the Philippines.
AES and its eight percent minority partner International Finance Corporation (IFC) paid the full purchase price upfront to complete the transaction of the plant in the Barangay Bula, Zambales Province in one step.
AES said the transaction costs and completion of a planned upgrade program to improve environmental and operational performance brought the total project cost to $1.057 billion.
The transaction funding included $635 million in secured non-recourse financing comprised of a $240 million, 18-year facility from IFC, a $200 million, 15-year facility from Asian Development Bank, and a $195 million, 10-year facility from a consortium of banks including ING Bank, Security Bank, Bank of Philippine Islands and Rizal Commercial Banking Corporation. In addition, over $30 million of unsecured working capital facility commitments have been obtained from three local banks.
Approximately 60% of the electricity generated at the Masinloc plant will be sold to electric distribution companies, cooperatives and special economic zones via power supply contracts of various tenors in place at the plant turnover. The remaining capacity will be sold through the wholesale power pool or under new contracts.
AES said it won the bid in a privatisation auction conducted by the Power Sector Assets and Liabilities Management Corporation (PSALM). Originally constructed in 1998, the plant utilises coal from a variety of sources in the Pacific Rim. Through this acquisition, AES now operates the Philippines’ first privatised thermal plant.
“This acquisition is a key component of our strategy to invest in areas where there is a significant need for new capacity and offers AES an excellent entry point into the growing Philippine economy through the lowest cost thermal plant in the system,” said Paul Hanrahan, AES President and CEO.
“This is a particularly attractive investment because the existing facility has the infrastructure in place to allow AES to add an additional 600 MW of generation capacity. As AES has done through similar acquisitions in other parts of the world, we expect to improve the overall efficiency and output of the existing plant, providing more reliable energy to the Philippine market.”
Mark Woodruff, executive vice president and President of AES’s Asia and Middle East region, said:
“The impressive local and international group of commercial and multilateral lenders reflects not only the strong fundamentals of the project but also demonstrates the strength of the project finance market in Asia.”
AES has been operating in Asia since 1994. Today, AES’s businesses in the region include electric utilities and generation facilities in China, India, Jordan, Oman, Pakistan, Qatar and Sri Lanka. AES has more than 5,000 MW of generation capacity in the region.
AES is one of the world’s largest global power companies, with 2007 revenues of $13.6 billion. With operations in 28 countries on five continents, its generation and distribution facilities have the capacity to serve 100 million people worldwide.
Its 13 regulated utilities amass annual sales of over 78,000 GWh and our 121 generation facilities have the capacity to generate approximately 43,000 megawatts.