Makati–(PHStocks)–Panay Energy Development Corp. (PEDC), a wholly owned subsidiary of Global Business Power Corporation (GBP)–a subsidiary of GT Capital Holdings Inc. (PSE: GTCAP)–has raised PhP11 billion from a 12-year syndicated loan facility to fund the ongoing construction of its 150MW clean coal-fired power plant expansion project in Iloilo City.
The PhP11 billion loan facility agreement was fully funded by a consortium of local financing institutions namely, the Bank of the Philippine Islands (PSE: BPI), China Banking Corp. (PSE:CHIB), Land Bank of the Philippines, Rizal Commercial Banking Corp. (RCBC, PSE: RCB), Philippine National Bank (PSE: PNB), and the Philippine American Life and General Insurance Company. Through First Metro Investment Corp. (FMIC), the lead arranger of the loan, PEDC’s PhP11 billion loan requirement was oversubscribed by PhP3.6 billion. Proceeds of the loan represented 70% of the PhP15.6 billion total project cost while the remaining 30% was financed through equity.
GBP Executive Vice President Jaime Azurin commented that the successful closing of the syndicated loan facility shall play a significant role in revitalizing Panay’s economy.
“The PhP11 billion funding couldn’t have come at a more opportune time as tight power supply is anticipated due to the accelerated business developments in Panay, especially in the areas of property development and tourism industries. We are truly honoured for gaining the confidence and support of like-minded financing institutions that serve as our reliable partners in fuelling economic development in the Visayas, particularly in Panay,” he said.
In a mere span of six years, GBP was able to secure four loan facilities that were instrumental in shaping the economic growth of the Visayas region. These loan facilities enabled GBP to serve the much needed additional power supply in 2011 with the operation of Panay Energy’s 2x82MW clean coal plant facilities in Iloilo and Cebu Energy’s 3x82MW power plant in Toledo, Cebu, eventually ending the rotating brownouts in the region. In 2014, GBP’s latest 1x82MW expansion project under Toledo Power Company began serving the additional power requirements of major industries in Toledo, which include Carmen Copper Corporation, Balamban Enerzone and CEBECO III. Once Panay Energy’s 1x150MW expansion project becomes operational by June 2016, Panay Energy will become the largest power generating facility in the Visayas.
Panay Energy was established in 2009 out of the need for adequate, reliable and cost efficient power supply in Panay island. More than reducing the price of electricity in Iloilo by as much as PhP3 per kwh, Panay Energy serves the baseload power requirements of Panay, including the island of Boracay. It has likewise lessened dependence on submarine cables which has significantly improved power supply efficiency. Dramatic development in Panay became evident as soon as power supply stabilized. Iloilo started to witness the establishment of shopping centers, Iloilo International airport, hotels, infrastructure projects and emergence of business process outsourcing (BPO).
With the resurgence of investor confidence, Panay Energy is currently constructing its 150MW expansion project in order to support the rapid business developments in Iloilo City and the rest of Panay island. Ongoing major businesses and property developments in Iloilo include the 75-hectare Iloilo Business Park of Megaworld Corp. (PSE: MEG), the 20-hectare Atria Park District of Ayala Land (PSE: ALI), the 20-hectare Gaisano Business Center and the high rise commercial and residential condominiums of Double Dragon Properties (PSE: DD). Focused on commencing operations by mid-2016, construction of Panay Energy’s expansion project is ahead of schedule and already 40% complete as of March 15.