AES earmarks $700M for Masinloc plant expansion

The local unit of American energy giant AES Corp. is earmarking at least $700 million for the initial 300-megawatt (MW) expansion of the 630-MW Masinloc coalfired power plant in Zambales, a ranking official said yesterday.

The company has decided to start with a 300-MW single unit expansion from the original plan of 600 MW, AES Philippines managing director Neeraj Bhat said on the sidelines of a forum organized by the European Chamber of Commerce of the Philippines yesterday.

“Right now, we’re going to start with 300 MW and as we line up contracts, we have the option to go for the full 600 MW,” he said.

For the initial 300 MW, investment cost is pegged “north of $700 million” which will be a combination of 70 percent debt and 30 percent equity, the company official noted.

“(Debt) will be locally funded by local banks. Signing will be very soon, before the end of the year,” Baht said.

Meanwhile, equity will be shouldered by the project proponents.

AES has a 51-percent stake in the plant while Electricity Generating Public Co. Ltd. (EGCO) Group of Thailand has 41 percent and International Finance Corp. (IFC), eight percent.

Bhat said the Masinloc expansion is on track for full-swing construction in the first quarter of 2016, but early works will be commenced towards year-end.

“We’ve signed a number of power sales agreements with northern Luzon and some other customers so we expect that to enter construction very soon with limited works this year and to be online in early 2019,” Bhat said.

AES is also close to sealing a deal with an engineering, procurement and construction (EPC) contractor, which the company official declined to name.

“We’re signing very shortly. It’s an international quality. We haven’t publicly disclosed it yet but it’s...a Western and high quality EPC contractor that’s done a lot of work with us. We have a strong relationship,” Bhat noted.