Jt venture to pay $325-M bid price for hydro complex

SN Aboitiz Power Benguet Inc. (SNAPB) is considering the full payment of the remaining $325-million bid price for the 175-megawatt (MW) Ambuklao-Binga hydroelectric power complex.

“We hope to conclude or take over the plant by the end of June. So we would have to pay the purchase price of $325 million and I think we will be able to conclude our financing by then. We will be paying in full,” Aboitiz Power Corp. (APC) president Erramon Aboitiz said.

Aboitiz said they also expect to tap various local banks, the World Bank’s International Finance Corp. (IFC) and Nordic Investment Bank to be able to raise at least 70 percent of the required payment.

The remaining 30 percent, Aboitiz said, will be shouldered by the shareholders through equity.

“It’s more or less the same lenders we have tapped for Magat — a group of local banks, IFC and Nordic Investment Bank. It’s roughly about 30 percent equity and 70 percent debt,” he said,

He said they would be raising some $200 million to rehabilitate the complex to increase its capacity by 20 to 30 percent.

According to Aboitiz, they would also seek the help of some banks to finance the rehabilitation of the facilities if needed.

He said the company now has $260 million in its balance sheet to fund these projects.

“Our whole strategy is to deploy those funds first and once we have exhausted that then we will raise some more money via the debt market,” he said.

As this developed, Hedcor Inc., a subsidiary of Aboitiz Power, is also looking at further expanding its presence in Mindanao particularly in the southern part.

Hedcor president and COO Rene Ronquillo said aside from Mindanao, they are also eyeing other sites in Luzon.

“Right now we’re looking at some sites in Mindanao and some sites in Benguet. Well most of our plants are still in Benguet so maybe we’ll go back there someday,” he said.

SNAPB is a joint-venture between SN Power Invest (SN Power) of Norway and Aboitiz Equity Venture (AEV), one of the country’s biggest conglomerates, each holding a 50 percent stake.

SN Power is a global renewable energy company, which is a 50-50 joint-venture between Statkraft, the Norwegian state-owned power company, and Norfund, the state-owned Norwegian investment fund. On the other hand, publicly-listed AEV is one of the biggest conglomerates in the country focusing on electricity, financial, food and transport sectors in the Philippines.

SNAPB is expected to take over the hydropower facilities next month and will put in place new management procedures, address technical issues such as sedimentation and dam safety and implement the rehabilitation of both plants.

The Aboitiz-SN Power consortium first acquired the 360-mw Magat hydropower plant with a $530-million offer.

SNAPB has already prepaid $371 million for the Magat power plant so it can take advantage of the favorable financing packages offered by the banks and other lending institutions to bidders of government’s power assets.