MANILA, Philippines - Monte Oro Grid Resources Corp. (MOGRC), the lead member of the consortium – currently operating the country’s power transmission highway, will secure a P2-billion loan from its mother firm A. Brown Co. Inc.
In a disclosure to the Philippine Stock Exchange, the publicly-listed A. Brown, managed by businessman Walter Brown, said it has obtained a P2-billion term loan from Banco de Oro Unibank Inc. MOGRC financed its 30 percent investment in National Grid Corporation of the Philippines (NGCP).
NGCP is the corporate vehicle used by the MOGRC-led consortium to bid for the 25-year concession of the National Transition Co. (TransCo).
MOGRC is 100 percent owned by Monte Oro Resources and Energy Inc., of which A. Brown holds 15-percent stake. It leads the NGCP consortion formed with Calaca High Power Corp. and the State Grid Corp. of China.
The group won the concession to operate and manage the system run by TransCo in a public bidding conducted by the government in December 2007. The group offered $3.95 billion for the concession contract.
Earlier, Brown, the NGCP president, said they plan to invest P10 billion for TransCo. as part of their commitment under the country’s Transmission Development Plan.
Under the privatization terms, the concessionaire, upon assumption of the operations of TransCo, would need to infuse a certain level of capital a year to finance the company’s upgrading and expansion programs.
Based on the TDP approved by the Energy Regulatory Commission for the period 2006-2010, TransCo would need $850 million annually to maintain the services of the country’s transmission highway.
Brown said aside from the possibility of tapping local banks for a short-term peso loan facility, they would also look at financing being offered by multilateral financial institutions.
Asian Development Bank and the International Finance Corp. of the World Bank earlier expressed interest to provide assistance of up to $200 million to the winning concessionaire of TransCo.
MOGRC was incorporated on Aug. 29, 2006as an investment holding firm of companies engaged or proposing to engage in infrastructure projects.
Calaca High Power, meanwhile, formed in 2006, is engaged in the business of operating, managing, maintaining and rehabilitating energy systems and services for gas, steam and electricity.
State Grid Corp. is of China , one of the world’s largest power utility companies in the business of power transmission, distribution and sale.
It serves 88 percent of China’s territories covering more than one billion customers.