Vivant eyes loan for Cebu power plant expansion

Vivant Corp. of the Garcia family of Cebu said it intends to borrow more than $20 million to fund its investment in the $400-million power plant expansion project in Cebu.

In a disclosure to the Philippine Stock Exchange, Vivant said the total investment for the project is estimated to be between $310 million and $400 million.

The company said that of this total estimated amount, Vivant, through its minority investment in Abovant, is expected to infuse approximately between $16.36 million and $21.12 million. Vivant is expected to loan to fund the investment.

The project will serve the power needs of Cebu and the Visayan grid, providing  security of power supply to the province of Cebu by a dedicated power supply source within the island, while reducing Cebu’s dependence on power supply sourced from outside Cebu Island.

The project will ensure that APC’s and Vivant’s distribution utility, Visayan Electric Co. Inc., will have additional power supply to address its growing power demand. The power plant is expected to be completed by the first quarter of 2010.

Vivant, APC and Global Formosa formed Abovant Holdings Inc. to expand the 100-megawatt (MW) Toledo power plant by another 246 MW.

Vivant said the investment is consistent with the agreement entered into with the Aboitizes and the Metrobank Group’s Global Business Power Corp. last August.

Abovant, which is 60 percent owned by APC and 40 percent by Vivant Energy Corp. (VEC), will invest, together with Global Formosa in a joint venture between Global Power and Formosa Heavy Industries, in a new three x 82 MW coal-fired power plant in the existing Toledo power station in the island of Cebu.

Power demand in Cebu is projected to increase annually by about nine percent.

Once completed, the project is expected to help solve the possible power shortage in the Visayas province in 2010.

It is projected that power demand in Cebu will grow rapidly in the next three years with the reopening of the Atlas Mining in Toledo City and the expansion of the Tsuneishi shipbuilding facility in neighboring Balamban town.

The Toledo power plant’s expansion is also crucial as this supplies the electricity needs of the Visayan Electric Co., Inc. (VECO) and the Cebu 3 Electric Cooperative, Inc. (CEBECO 3).

There is a need to expand the capacity of power facilities in the Visayas areas as the commercial operation of the wholesale electricity spot market (WESM) in the area is being scheduled by early part of next year.