News: Suez-Tractebel seeks loans to finance Calaca acquisition -
23 Jan 2008
Suez-Tractebel S.A., the winning bidder for 600-megawatt (mw) Calaca coal-fired power plant, is planning to tap various financial institutions to partly finance the $786.5-million acquisition of the Batangas-based power facility.
Suez Energy Asia Co. Ltd. senior vice president Ramani Hariharan said they had engaged in discussions with the World Bank’s International Finance Corp. (IFC), Asian Development Bank (ADB) and other financing entities for possible financial support.
“The company is working out financial support from IFC, ADB and the ONDD or the Belgian export credit agency and other commercial banks to raise the needed 40-percent downpayment for the Batangas facility,” he said.
Suez-Tractebel, Belgium’s top utility holding company and one of the world’s top independent power producers, through its corporate vehicle Calaca Holdco Inc. (CHI), was declared the highest bidder for the Calaca facility in the October 2007 bidding.
CHI is wholly owned by Suez-Tractebel through its wholly-owned subsidiary Belgelectric Finance B.V. The company has operations in more than 100 countries in five continents. According to the Suez-Tractebel official, the company is now closely coordinating with the Power Sector Assets and Liabilities Management Corp. (PSALM) to determine the best option for the Calaca payment.
“The 40-percent downpayment will be made when certain milestones required as per the project agreements have been met,” he said.
Hariharan said aside from looking for financing for the bid cost, he said they are currently studying several options to expand the coal plant’s capacity by 300 megawatts (mw) to 600 mw
But he said there is a need for the company to review the financing and schedule of the proposed expansion.
“The timetable and capital expenditure for the expansion have not yet been finalized,” he said.
Expanding Calaca’s capacity would be an advantage for Suez-Tractebel as the facility has been allocated a substantial 287-mw power supply contract, or about 48 percent of the plant’s rated capacity. About 169 mw will be contracted energy from the Manila Electric Co. (Meralco), the largest power distributor in Luzon.
In addition, Suez-Tractebel is looking at various business opportunities to expand its presence in the country’s energy sector, Hariharan said.
“Bidding for other generating assets of National Power Corp. is one of the elements of our growth strategy,” he said.
If possible, he said they are also exploring the possibility of putting up new power plants.
“In addition to possible acquisitions, Suez will pursue the development of greenfield projects. We are interested in renewable energy — wind, geothermal, biomass and hydroelectric — projects in the Philippines. Our strategy is to build a balanced portfolio in terms of fuel mix,” he added.