Metrobank's power unit allots $600 million for Iloilo, Cebu projects

MANILA, Philippines - Global Business Power Corp. (GBPC), the power generation arm of the Metrobank group, is setting aside $600 million this year to complete its power plant projects, a top company executive said.

GBPC president Jesus Alcordo told reporters that “predictably, our capital investments this year are focused on the expansion sites in Iloilo City and in Toledo City, Cebu.”

“Both projects have a combined cost of about $880 million. For 2010, GBPC still needs to spend about $600 million to complete the projects,” he said.

Alcordo noted that the 246-megawatt (MW) Cebu project is the single largest locally syndicated peso-denominated loan facility at over P16 billion. In June 2009, 11 banks signed the 12-year loan agreement with GBPC unit Cebu Energy Development Corp. for the project.

On the other hand, the 164-MW Iloilo project, under another GBPC subsidiary Panay Energy Development Corp., will require financing of about P14 billion presently being arranged with local banks. The loan agreement for this project is expected to be signed early this year.

“We looked at peso financing for both projects to ensure more stable operations and management expenses over time and to ensure a more stable and competitive energy rate for our clients and partners,” Alcordo said.

Both projects are clean coal-fired power plants adopting the latest circulating fluidized bed (CFB) boiler technology which ensures minimal emissions and waste and hopes to address the need for additional base load power in the Cebu-Negros-Panay (CNP) grid.

“All in all, we’re looking at 410 MW of new or added capacity for the CNP grid that would significantly stabilize grid voltage and also serve to further propel the economic growth in these islands, particularly in Cebu and in Panay,” Alcordo said.

The GBPC official added that at present, they have no plans to bid for National Power Corp. (Napocor) assets.

“We would like to focus on our ongoing expansion projects. GBPC is keenly focused on building additional base load capacities where they are urgently needed,” he said.

He said they are also eyeing greenfield projects to help alleviate the power supply shortage in the Visayas.

“At present, the CNP grid is highly dependent on imported power coming from Leyte Geothermal. The increasing power demand in these islands can no longer be supplied by existing power generating units. It is for this reason that GBPC decided to build its new plants with the objective of not only addressing the current worsening power crisis in Cebu and in Panay but also improving the reliability and stability of power within the Visayas grid,” he said.

The three 82-MW Toledo project broke ground in January 2008 and began construction in the third quarter of the same year.

“We are on schedule and the first unit will be online and synchronized to the grid by the first quarter of 2010. The second unit is expected to be online by June and the last unit by year end to make the power plant fully operational by the end of 2010,” he said.

The two Panay 82-MW project, on the other hand, started in September 2008 and actual construction commenced in the third quarter of 2009. The first unit will be commercially operational in October and the second unit at the beginning of 2011.

“The timely completion of the two power plants is in line with our commitment to immediately address the worsening power crisis in the Visayas,” Alcordo noted.

As a member of the Metrobank Group of Companies, he also pointed out that GBPC is committed to environmental management.

“All of our projects including our efforts to adopt clean coal technologies in our expansion projects are geared towards our commitment to environmental sustainability. This commitment, hand in hand with our goal to be the lead electricity generator in the Visayas, naturally prompts us to expand our operations into greenfield projects, particularly in the Visayas with some possibilities in Luzon,” he said.