$475-M package for Ilijan power plant inked today

After a delay of nearly 16 months, the $475-million financial package for the 1,250-megawatt (MW) gas-fired power plant in Batangas will be signed and closed today.

The plant will be operated by a consortium led by Kepco-Ilijan Corp. (Keilco) under a 25-year build-operate-transfer (BOT) contract with the National Power Corp. (Napocor). The Keilco consortium will get a $475-million loan from Export-Import Bank of the United States (USEximBank), the Korean EximBank, and the Japan Bank for International Cooperation (JBIC).

The entire project is estimated to cost a total of $700 million. Kepco Philippines, Inc., a subsidiary of the Korean Power Corp. (Kepco) and main contract holder has infused internally-generated funds amounting to $250 million to start the construction of the natural gas-fired power plant.

Kepco released $170 million as initial funds for the operations as early as last year while its strategic partners started infusing funds sometime in the middle of this year.

"All the critical issues have ironed out," Oh In-Taek, chief executive officer of Keilco, was quoted to have said.

Delays in the financial closing were caused by concerns aired by the creditors that Napocor or the Philippine government would not be able to meet any financial requirements or obligations. Assurances by the Department of Finance and the Office of the President cleared the way for the closing.

The consortium is composed of Keilco with 51 percent, Mitsubishi Electric (21 percent), Southern Energy Philippines Inc. (20 percent), and Kyushu Electric (eight percent).

Mitsubishi Heavy Industries is the supply procurement and engineering services firm tapped by the consortium and Napocor. – Ted Torres