International banks fund purchase of Philippines’ 360-MW Magat

SN Aboitiz Power Inc. has obtained international bank loans worth US$380 million to help finance the privatization purchase of the 360-MW Magat hydroelectric project in the Philippines.

SN Aboitiz Power, a joint venture of Aboitiz Equity Venture Inc. and Statkraft Norfund Power Invest of Norway (SN Power), won privatization bidding in 2006 with an offer of US$530 million for Magat, the Philippines’ largest hydropower plant. (HNN 8/24/07)

Aboitiz Power, which heads SN Aboitiz Power, told the Philippine Stock Exchange October 2 that it received a dollar-denominated loan from the World Bank’s International Finance Corp. (IFC) and from Nordic Investment Bank and a peso loan from seven Philippine banks.

IFC previously said it would be providing a US$105 million loan, while Nordic Investment Bank contributes a US$47 million senior loan, and the Philippine bank consortium completes financing with the equivalent of US$228 million in peso loans. IFC said the total project cost is estimated at US$542 million, including the bid price of US$530 million and a provision for working capital of US$12 million.

Magat, which was built on the Magat River at a cost of US$83.7 million, started commercial operations in 1983 in Isabela province in the northern Philippines. The largest operating hydro project in the Philippines, it has four 90-MW units commissioned in 1983-1984.

SN Aboitiz plans to upgrade and rehabilitate the plant. Philippine officials said the project can accommodate two additional generating units for expansion. The multi-purpose earth-and-rockfill dam is used for irrigation, flood control, and power generation.

Eleven groups eye 75-MW Ambuklao, 100-MW Binga

The Philippines’ power sector privatization agency says 11 investor groups have filed expressions of interest in the privatization auction of the 75-MW Ambuklao and 100-MW Binga hydroelectric projects. Letters of interest were due September 14, with bids due November 28. (HNN 8/28/07)

The government’s Power Sector Assets and Liabilities Management Corp. (PSALM) said eight of the interested parties are from the Philippines, some with foreign partners. Three are foreign investors from the Asia-Pacific region, the United Kingdom, and Europe, PSALM said.

The government is attempting to raise up to US$5 billion over several years by selling power plants of debt-strapped National Power Corp. (Napocor). Ambuklao and Binga are located 19 kilometers apart on the Agno River at Bokod and Itogon in Benguet Province of Luzon Island.

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