IFC willing to bail out troubled Callandra

MANILA, Philippines - International Finance Corp. (IFC), the private sector investmet arm of the World Bank, said it is likely to provide financial assistance to Callandra Liquefied Compressed Natural Gas (LCNG) Fuels Corp.

Jesse Ang, IFC resident representative to the Philippines, told reporters that “if they (Callandra) need our assistance, we are willing to support.”

Ang said they believe that Callandra’s project is aligned with the IFC’s thrust.

“They are into CNG. It (the company) is focused on climate change mitigation and we support the promotion of clean fuel. If they need support, we are willing (to provide) them,” he said.

Callandra president Randall Antonio confirmed they would push through with their plan to talk to IFC for financing.

“Yes, Callandra is still seeking financing,” Antonio said, when asked if they would like to continue talks with IFC for a possible loan arrangement.

Ang had indicated that the size of the financing assistance that they would extend to Callandra would depend on the amount that the company could justify to the lending institution.

“As to the amount, it depends on how much they need and if we see the need to give the amount to them. We will evaluate their application,” the IFC executive said.

Based on the initial plan, Callandra would be seeking the assistance of state-owned Development Bank of the Philippines (DBP) for the fund requirement of Phase 1 of the proposed CNG fueling infrastructure.

The same plan indicates that Callandra intends to tap IFC for the funding of Phases 2 and 3, including the expansion programs for the importation, processing, distribution and retail of both LNG and CNG.

It was also learned that Callandra will also be joined by Merritt Energy Partners, headed by former Energy Secretary Vincent Perez, and Xinao Gas of China in this endeavor.

According to Antonio, the company has also started efforts for the Banked Gas discussions with the Philippine National Oil Co. (PNOC). Banked gas is the value of inventory held due to ‘take or pay’ contractual arrangements. A ‘take or pay’ contract is an arrangement whereby the purchaser pays for gas at an agreed minimum quantity each year. If at the end of the year, the minimum amount of gas has not been taken, the company has the right in future periods to take the shortfall.

“Callandra hopes to eventually forge a mutually beneficial relationship with the PNOC as we develop the natural gas downstream distribution network for the Philippines,” Antonio said.

The Callandra executive said their company will be introducing a unique hybrid technology which will allow them to use Malampaya natural gas without necessary building expensive gas pipelines.