DMCI Power Corp., a wholly-owned unit of the Consunji family’s DMCI Holdings Inc., is planning to borrow P5 billion from a group of commercial banks to fund the construction of its coal-fired power generation plants in the provinces of Masbate and Ilolilo.
In a press briefing following DMCI’s annual shareholders’ meeting, company president Isidro Consunji said DMCI Power is in talks with several banks, including Banco De Oro Unibank Inc., for a loan facility to partially finance the two projects worth an estimated P10.8 billion.
Ed Francisco, president of BDO Capital & Investment Corp., said he expects the financial closing for the two power plants by the end of the year as negotiations with electric cooperatives and other distribution utilities have yet to be completed.
“Because they have good management and credit, we will fund as much as we can,” Francisco said.
DMCI Power has secured the Securities and Exchange Commission’s approved to raise its authorized capital stock to P1 billion from only P80 million. The capital increase will allow the company to secure project financing for the two power plants.
The company will start the construction of a 100-megawatt coal-fired power plant in Concepcion, Iloilo as soon as it signs a power supply agreement with power distributors in Panay Island. The plant is estimated to cost P9 billion.
Once a power supply agreement is signed with electric cooperatives, construction can start within a month and may take two years to complete the project.
The Masbate power plant, on the other hand, is estimated to cost around P1.8 billion.
On Jan. 15, 2007, the state-owned National Power Corp. awarded to DMCI Power the Masbate plant, one of the small utilities being privatized. DMCI Power will supply electricity in Masbate through a 15-year power supply agreement with the Masbate Electric Cooperative.
DMCI Power said it is committed to provide affordable, reliable, and sufficient power supply to grid and off-grid areas in the Visayas.
Consunji said the company is hoping to capitalize on the anticipated energy shortage by 2010 as its power investments are expected to provide recurring profits.
The coal-fired power plant is among the long-term measures being pushed by the energy industry and business groups to address the power supply deficit on Panay Island and the rest of the Western Visayas region.
DMCI Power has signed an agreement with AsiaEnergy Development Co. Pte. Ltd. (AED), to form a 50-50 joint venture corporation named DMCI Asia Energy Power Corp. (DMCI Asia Energy) which will take charge of the development and operation of power generation plants and facilities in the Philippines.
AED is a Singaporean company, established by Argosy Partners Inc., engaged in the business of investing in energy-related businesses and ventures in Asia. — Zinnia Dela Peña