News: ADB to extend co-financing to TransCo, Calaca plant -
17 Jan 2008
The Asian Development Bank’s (ADB) loan portfolio for the Philippine energy sector this year will primarily focus on two important transactions of power asset divestments.
These will be the proposed co-financing for the National Transmission Corporation (TransCo) and the 600-megawatt Calaca coal-fired power facility.
The ADB plans to match the loans to be extended by the International Finance Corporation (IFC), the private sector arm of the World Bank Group, to the TransCo concession deal and the Calaca power facility’s acquisition by Suez Energy Asia Co. Ltd., a subsidiary of French-Belgian firm Suez Energy. The IFC previously announced plans of extending $ 250-million loan to the TransCo concessionaire; while the Calaca plant buyer was reportedly seeking a loan of $ 150 million to $ 200 million.
The loans for TransCo and Calaca will be on top of the co-financing it earlier considered for the 600-MW Masinloc coal-fired plant; the $ 100 million loan to the National Electrification Administration (NEA) and the proposed loan to government for the energy efficiency initiatives of the Department of Energy. ADB principal energy specialist Yongping Zhai noted the loans it could extend to the winning bidders for both Calaca and Masinloc will come from the Bank’s private sector lending window.
In the case of TransCo, the co-financing support will have to come from a standby facility. Sources said they are just waiting for signals if the Concessionaire will "request ADB for such a facility."
The loan to NEA, he said, is intended to strengthen rural electric cooperatives; and the actual amount shall be based on the findings of a feasibility study undertaken this year. The ADB has been one of the most aggressive lenders to the country’s power sector even prior to the introduction of policy reforms in the industry.
It has also been the first one to give its consent to the government for the transfer of NPC’s loans and assets to the Power Sector Assets and Liabilities Management Corporation.
Even at the industry’s transition phase, the ADB consistently extended loans to the government to pursue the implementation of reforms, including the setting up of the Wholesale Electricity Spot Market.
Source: Manila Bulletin Online, by Myrna M. Velasco, 1.17.08