AES paying $930-m Masinloc bid in full next week

By Alena Mae S. Flores - Manila Standard Today

AES Corp. of the US is expected to pay its entire $930-million bid for the 600-megawatt Masinloc coal plant facility in Zambales anytime next week, a government official said yesterday.
Jose Ibazeta, president of Power Sector Assets and Liabilities Management Corp., told reporters that AES officials had indicated the company would pay the full amount on or before Feb. 15.

AES is required to make a 40 percent down payment and pay the 60 percent balance over a certain number of years.

Ibazeta said the company was opting for a full payment, instead, to take advantage of lower interest rate on borrowings.

“We’re just waiting for something to be completed from our side. There are some issues we have yet to complete. Like the land, right of way issues, etc,” Ibazeta said.

AES has been working on the financing package to pay for the acquisition of the Masinloc coal facility.

AES received a financing package from International Finance Corp., the investment arm of the World Bank, of up to $275 million to partly fund the acquisition. A portion of the IFC financing package will be invested in the power plant as equity.

The Asian Development Bank has offered the same amount to AES, which also initiated talks with some local banks to fund the acquisition.

The purchase of the Masinloc facility is estimated to cost approximately $1.1 billion, which includes the acquisition price, funding for the debt service reserve account, transaction costs refurbishment works and initial working capital needs.

AES is looking at additional investments of another $1 billion to expand the capacity of the Zambales plant by another 600 MW.

“We are intending to expand and double Masinloc’s capacity as soon as we complete the acquisition. We may spend up to another $1 billion,” Matthew Bartley, AES Philippines president and chief executive, told reporters earlier.