An Ayala-led consortium has executed the documentary requirements to raise funding for a 540-megawatt coal-fired power plant in Kauswagan, Lanao del Norte, which was estimated to cost $1 billion.
“The plant will help alleviate the tight power supply situation in Mindanao,” Ayala Corp. said in a disclosure to the Philippine Stock Exchange.
It said construction of the plant was set to start in early 2015.
GNPower Kauswagan Ltd. Co., a limited partnership owned by Ayala Corp. subsidiary AC Energy Holdings Inc., signed the definitive documentation along with its partners, Philippine Investment Alliance for Infrastructure (PINAI) Fund and Power Partners Ltd. Co.
“The project is currently underwritten with a combination of debt and equity. We can increase leverage over time,” Eric Francia, head of energy and infrastructure group at Ayala Corp. said in a text message.
The definitive documentation for the financing was needed to commence the phased construction of the 4×135-MW coal-fired power project. The disclosure did not say how much the syndicated loan was but earlier reports suggested that the project cost was worth about $1 billion. Proponents typically cover 30 percent of the cost with equity.
“The debt will be financed by a syndicate of domestic banks with additional debt from international banks,” the disclosure said.
AC expects to reach its goal of operating at least 1,000 megawatts of attributable power generation capacity by 2018, during which it would have deployed $1 billion in equity in a mix of run-of-the-river, wind and coal-fired power plants.
For the Kauswagan project, proponents are expected to infuse $300 million in equity based on a 70 to 30 percent debt to equity mix. It is expected to be operational by 2017.
Ayala will have the majority of the capacity of the Lanao plant.
In 2011, Ayala said it was aiming to develop a power portfolio with 1,000 MW in attributable capacity over a five-year period.
It had so far five projects—two coal-fired projects, two wind farms and one run-of-the-river hydro project.
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