Oriental Energy putting up Aklan hydropower project

Oriental Energy and Power Generation Corporation will be putting up the 18-megawatt Timbaban hydropower project to be sited in Madalag, Aklan in the Visayas grid, according to the stock exchange disclosure of its parent firm Oriental Peninsula Resources Group, Inc.

For the venture, the parent company will be subscribing to 300 million worth of shares of subsidiary Oriental Energy, as part of the cash infusion strategy on the hydropower project.

Oriental Peninsula further noted that it will enter into a corporate guaranty for Oriental Energy’s obligations “under the bank loan facilities of the Development Bank of the Philippines up to an aggregate amount of R2.0 billion.”

The loan facility, it was emphasized, shall carry a fixed interest rate of 6.75-percent per annum or the applicable repriced interest rate.

Oriental Peninsula said “the borrower shall utilize the amount to partially finance the project cost and related expenses” pertaining to the construction of its 18MW hydropower plant.

The loan will be for 12 years, but the parent firm’s guaranty “shall be extinguished earlier upon delivery by the borrower to the lender of proof of project takeover.”

The other condition rests on the issuance of a certificate of endorsement that shall be rendered by the Department of Energy (DOE) on the project’s eligibility for feed-in-tariff (FIT) incentives.

The company noted that its Timbaban hydropower plant will start commercial operations prior to the expiration of the FIT incentives as prescribed by the energy department.

The option on the plant’s capacity off-take is also the signing of a power purchase agreement (PPA) between the borrower-firm and a counterparty that shall be acceptable to the lender.

Aside from the Timbaban hydropower venture, Oriental Energy has also projects of in Manolo Fortich in Bukidnon and Odiongan in Romblon. (MMV)