Upon the request of CBK Power and its lenders, Napocor has asked DOF for the issuance of a "Government Acknowledgment and Consent Agreement" (GACA), which is standard for BOT projects.
The issuance of the GACA will cause CBK Power, composed of IMPSA and Edison Mission, to disburse the $70.8-million interest-free loan, which has a 15-year term, and pave the way for the rest of the company’s $450-million investment. IMPSA won the contract for CBK in December of 1997 after a long, four-year process.
However, delays in the approval process have hindered the closing of the project’s financing. The project has been scrutinized and approved by the Department of Energy, Department of Environment and Natural Resources, Board of Investment, the National Economic and Development Authority, the Bangko Sentral ng Pilipinas and Department of Justice.
The company planned to do the disbursement on Nov. 7, but in the absence of the signing of the GACA had to postpone it. Sources from Napocor assured Finance Secretary Pardo that the issuance of a GACA will allow the disbursement of the $70.8 million before the Christmas holidays.
IMPSA has already begun work at the CBK complex to prevent technical problems from occurring at the plant. Last October IMPSA completed the rehabilitation of 172 MW for the first unit of Kalayaan plant and completed the rehabilitation of 172 MW for the first unit of Kalayaan Plant and has equipment ready for shipment. The issuance of the GACA will trigger the disbursement of funds and will allow IMPSA to proceed with the further rehabilitation of the hydropower plants and their expansion from about 300 megawatts to 750 megawatts in two years' time.
Eighteen international banks, namely, Societe Generale, BNP Paribas, The Dai-Ichi Kangyo, The Industrial Bank of Japan, Citibank, ABB Structured Finance B.V., ANZ Singapore, Banco Santander Central Hispano, The Bank of Tokyo-Mitsubishi, Bayerische Hyppo-und Vereinsbank AG, Credit Agricole Indosuez, Fortis (Netherlands), KBC N.V., Norddeutsche Landesbank Girozentrale, The Norinchukin, The Sanwa, The Tokai, Westdeutsche Landesbank Girozentrale, UniCredito Italiano, are providing the funding for the project.
A group composed of the largest insurance companies in the world have provided Asia’s largest privately insured political risk-covered project finance in support of the Philippines.