Aboitiz to raise P50 billion for power plants

MANILA, Philippines -  Aboitiz Power Corp. (APC), through its subsidiaries Therma South and RP Energy, will be raising P50 billion in July to finance the construction of their proposed coal-fired power plants.

APC president and CEO Erramon Aboitiz said they are holding preliminary talks with several financial institutions for the project financing.

“We haven’t really signed any mandate or anything like that, we’ve just been talking to different banks about the possibility. Hopefully, when everything is a go, that’s probably when we will do the fund-rising,” he said.

For the Davao power plant project, he said they are now waiting for the endorsement of Davao City government within the month. They are also applying for an environmental compliance certificate (ECC) for the same project, he added.

Aboitiz, however, said they would be spending two-thirds or P33 billion for the 600-megawatt (MW) Subic coal-fired facility and about P17 billion for the 150-MW Davao project.

“It depends whether we do 600-MW in Subic or not. But if we do 600 MW in Subic, we are talking about financing in the neighborhood of about P50 billion for both plants. In the project level, its basically RP Energy in Subic and Therma South in Davao. We have no plans of raising any money on the parent level,” he said.

“We are waiting for the endorsement of the Davao City council. and We hope to get that within the month. We also have applied with the DENR for our ECC so again our internal target for that is probably sometime July. So, that’s the timetable. As soon as we get that, we would like to start construction within the third quarter if we get it on those days.”

APC is set to bid out the EPC (engineering, procurement and construction) contract for the Subic power plant.

APC, through its joint venture with Taiwan Cogeneration International Corp. called Redondo Peninsula Energy Inc. (RP Energy), will put up a 600-MW coal plant at the Subic Freeport. The plant is expected to be completed by 2013.

Aboitiz said for 2011, they have set aside some P42 billion or which $15 million or P750 million have already been spent for the projects of unit AP Renewables Inc.

“Basically, 90 percent of the capex for 2011 will go to the two coal power plants if they push through this year,” he said.

Over the next three years, the group eyes to spend about P100 billion.