BPI Capital sets landmark power loan

MANILA, Philippines – BPI Capital Corp. has arranged a landmark, syndicated loan of up to P10 billion for the construction of a 68.8-megawatt (MW) run-of-river hydroelectric power plant in Manolo Fortich, Bukidnon. Aboitiz Power Corp. subsidiary Hedcor Bukidnon Inc. will operate the group’s latest foray into renewable energy in addition to its 22 existing hydropower plants. The Bukidnon project is among the run-of-river facilities under the Philippines’ feed-in tariff program of the Aboitiz Group. BPI Capital’s financing arrangement for the Bukidnon hydroelectric plant is a milestone not just for the investment bank, but serves as landmark deal for the renewable energy sector in the Philippines. Previous similar mid-sized renewable energy projects were funded mostly through equity as borrowing cost was too prohibitive. And while commercial banks generally shied away from renewable energy projects that were deemed as more expensive sources of electricity compared to fossil based fuels, changes in the feed-in tariff’s regulatory framework and increased incentives have enhanced the project’s overall bankability. BPI Capital’s pursuit of providing innovative, industry-leading financing solutions has allowed it to spearhead a syndicate of local banks to engage the fledgling renewable energy space. BPI Capital is the issue manager and bookrunner for the project, with SB Capital Investment Corp. as joint lead arranger and Asia United Bank as co-lead arranger. The project, which taps into the rich hydroelectric power base of Mindanao, will help support the region’s growing power needs. The Bukidnon project’s loan facility was signed in September 2015.