MANILA, Philippines — Listed mining holding firm Oriental Peninsula Resources Group Inc. is venturing into power as it takes in a 30 percent stake in affiliate Oriental Energy and Power Generation Corp.
In a disclosure to the Philippine Stock Exchange, Oriental Peninsula said its board approved the subscription in Oriental Energy amounting to P300 million worth of common shares.
The shares will be taken from Oriental Energy’s planned increase in authorized capital stock.
“The subscription will result to a 30 percent ownership in Oriental Energy,” the disclosure said.
Oriental Energy is a renewable energy company majority owned by Citimax Group Inc., also an affiliate of the Oriental Peninsula which is majority owned by its chairman, president and CEO Caroline Tanchay.
Meanwhile, Oriental Peninsula is also entering into a corporate guaranty for Oriental Energy’s obligations with Development Bank of the Philippines (DBP), as approved by company board.
This means the mining firm backs Oriental Energy to repay its loan of up to P2 billion with a fixed interest rate of 6.75 percent per annum.
The loan has a 12-year term but the guaranty will be extinguished once Oriental Energy submits proof of project takeover and Department of Energy (DOE)-certified copy of the certificate of endorsement of feed-in tariff (FIT) eligibility or a signed power purchase agreement.
The said loan amount will be used to partially finance the construction of the 18-megawatt (MW) hydropower plant in Timbaban, Madalag, Aklan.
The Timbaban hydropower plant is scheduled to start operations before the FIT expires at the end of 2019.
DOE extended the deadline to meet the FIT installation target for run-of-river hydro and biomass technologies, which were allotted an installation target of 250 MW each.
Latest DOE data available on its website showed a total of 28.6976 MW had been taken up by existing run-of-river hydro projects, while 144.8 MW had been consumed by biomass plants as of end-2016.
Apart from the 18-MW Timbaban hydropower project, Oriental Energy also has hydropower projects in Manolo Fortich, Bukidnon and Odiongan, Romblon, Philippines.
Oriental Peninsula is focused on the mining operations of its 99-percent-owned unit City Nickel Mines and Development Corp.. It has two mining rights in Palawan, namely the Pulot Mine and the Toronto Mine which are both covered by a mineral production sharing agreement (MPSA) with the government.