Oriental Peninsula formalizes entry into power sector

MANILA, Philippines — Listed mining holding firm Oriental Peninsula Resources Group Inc. has formalized its entry into the power sector following its capital infusion in affiliate Oriental Energy and Power Generation Corp.

In a disclosure to the Philippine Stock Exchange yesterday, Oriental Peninsula said it now owns 30 percent of Oriental Energy after the Securities and Exchange Commission’s approval of the increase in the authorized capital stock of Oriental Energy from P30 million to P2 billion.

Part of the authorized capital hike was from the P300-million share subscription of Oriental Peninsula in the power firm.

Oriental Energy is a renewable energy company majority owned by Citimax Group Inc. which, in turn, is majority owned by  Oriental Peninsula's chairman, president and CEO Caroline Tanchay.

Oriental Energy owns, operates and maintains an 18-megawatt (MW) hydropower plant in Timbaban, Madalag, Aklan. It also has hydropower projects in Manolo Fortich, Bukidnon and Odiongan, Romblon.

Oriental Peninsula earlier announced its entry through a corporate guaranty for Oriental Energy’s obligations with Development Bank of the Philippines (DBP).

This means the mining firm backs Oriental Energy to repay its loan of up to P2 billion with a fixed interest rate of 6.75 percent per annum.

The loan has a 12-year term, but the guaranty will be extinguished once Oriental Energy submits proof of project takeover and Department of Energy (DOE)-certified copy of the certificate of endorsement of feed-in tariff (FIT) eligibility or a signed power purchase agreement.

The loan amount will be used to partially finance the construction of the 18-MW Timbahan hydropower plant, scheduled to start operations before the FIT expires by end-2019.

The DOE extended the deadline to meet the FIT installation target for run-of-river hydro and biomass technologies, which were allotted an installation target of 250 MW each.