Alsons eyes P3 B borrowings

MANILA, Philippines — Alsons Consolidated Resources Inc., the listed holding firm of the Alcantara Group, is set to borrow up to P3 billion by mid-2018 to bankroll the completion of the 15-megawatt (MW) Siguil run-of-river power plant in Maasim, Sarangani, its first renewable energy venture.

The company is in talks with a couple of banks for a project finance loan of up to P3 billion, Alsons executive vice president and COO Tirso Santillan said in a text message to The STAR.

“We are in serious talks with a couple of banks. A P3-billion loan will likely require only one or two banks,” he said.

The company, however, is not in a hurry to close the project financing, which would take place by the middle of 2018.

“Bank financing is usually the last piece to be put in place in a project,” Santillan said. “We won’t need to draw on the loan until mid next year.”

In September, Alsons infused up to P1 billion in the Siguil run-of-river power plant under Siguil Hydro Power Corp. (SHPC), a subsidiary of its renewable energy unit Alsons Renewable Energy Corp. (AREC).

Construction of the Siguil hydro project, which has a total cost of P3.7 billion, is expected to start within the year once it completes all necessary permitting and formalities.

The project is expected to begin commercial operations within the first half of 2020, providing power to Sarangani province, General Santos City and key municipalities of South Cotabato.

Once operational, half of the project’s carbon credits will be sold to the Japanese government, after an international consortium agreement was signed among Alsons, AREC, SHPC and long-time Japanese partner Toyota Tsusho Corp.

This will be done through the Japanese government’s Joint Credit Mechanism (JCM) for the reduction of world-wide carbon emissions.

A JCM project is typically implemented by Japan and a host country through bilateral agreements. Under the mechanism, projects using advanced low-carbon technology are implemented and the resulting greenhouse gas emission reductions may be credited to the project proponents of both participating countries.

Alsons said this would allow the Siguil project to receive additional revenues through the sale of carbon credits.