Subic Enerzone secures P100-M loan from DBP for capex

Aboitiz-led Subic Enerzone Corp. (SEZC) has obtained a P100-million loan from the Development Bank of the Philippines (DBP) to fund its capital expenditures for this year and refinance existing debts.

The 12-year loan will be paid in 48 equal monthly installments commencing at the end of the first quarter from the date of initial draw down and with a corresponding interest rate.

The Energy Regulatory Commission (ERC) approved the said loan, noting that this would be beneficial to SEZC's customers.

"A perusal of the evidence presented by SEZC showed that the loan, which shall be applied to finance additional capital projects under the distribution management services agreement (DMSA), as well as to refinance its existing term loan of P185 million with DBP, will benefit consumers in terms of continuous, reliable and efficient power supply as mandated by Republic Act 9136," the ERC said.

Subic Enerzone is a consortium composed of Aboitiz Equity Ventures, Davao Light & Power Co., Aboitiz Power Corp. and San Fernando Electric Light & Power Co.

The utility is contracted to provide power distribution services to the Subic Bay Metropolitan Authority (SBMA) until 2028. The company pays SBMA P40 million annually for the lease of power facilities and other properties.

Under the DMSA, SEZC shall invest some P368 million within the first five years of the service period to rehabilitate the existing power distribution system at the Subic Freeport Zone.

In September last year, the ERC approved SEZC's capital expenditures, amounting to P210.27 million. These covered the acquisition of machines and equipment, installation of distribution meters as well as upgrade of its facilities and system lines.

The company has listed 21 projects under its application with the ERC. Of the number, 11 of were already completed while 10 are still ongoing. The current projects are estimated to cost P179.94 million. ABS CBN NEWS

Aboitiz Power buys 20% of Subic Enerzone for P92M

Aboitiz Power buys 20% of Subic Enerzone for P92M

Aboitiz Power Corp. has acquired the remaining 20-percent stake of Team Philippines Industrial Power II Corp., formerly Mirant Philippines, in Subic Enerzone Corp. for P92 million.

The acquisition brings Aboitiz Power's stake in Subic Enerzone to 100 percent, which includes the 35-percent stake held by its unit Davao Light and Power Co. Inc. in the company.

Aboitiz Power earlier acquired 25 percent of Subic Enerzone from its parent Aboitiz Equity Ventures Inc., San Fernando Electric Light and Power Co. Inc., Okeelanta Corp. and Pampanga Sugar Development Corp. through a share swap.

The swap has yet to be approved by the Securities and Exchange Commission.

Subic Enerzone operates the power distribution system of the Subic Bay Freeport Zone under a 25-year agreement with the Subic Bay Metropolitan Authority, which it won through a competitive bidding in 2003. ABS CBN NEWS

$420-M coal-fired power plant to rise in Subic

POWER companies in the Subic Bay Freeport are putting up additional production facilities and improving distribution systems in anticipation of the influx of more investment projects within the area in the next few years.

Subic Bay Metropolitan Authority (SBMA) Administrator Armand Arreza said the Redondo Peninsula Energy Inc. will start construction of a $420-million coal-fired power plant in the area next year. At the same time, the Subic Enerzone Corp. will be undertaking a P210-million systems installation and rehabilitation project.

“Investors worldwide are looking for investment sites with stable but cheap power supply, along with accessibility and security, investment perks, and skilled manpower,” Arreza explained.

“These power projects are crucial to the growth of the Subic Freeport and the local economy because they will help reduce the cost of electricity in Subic, as well as address a projected increase in power demand,” he said.

According to Subic Enerzone, operator of the power distribution system in the Subic Freeport, power consumption in its Subic franchise area has been increasing over the past few years, with a total of 17.4 million kilowatt hours consumed last month.

“This is why we have to upgrade the power system in Subic, and put up additional generation facilities on top of Subic’s total output of 130 megawatts, so that we could be more competitive,” Arreza said.

Arreza pointed out that Malacañang’s recent order to expand the coverage of Subic’s tax- and duty-free regime is expected to increase investment projects in the locality and further tax power supply in the Luzon grid where a 1,950-megawatt shortage is projected within the next few years.

“You add to this equation the continuing growth of Clark Freeport, completion of the Subic-Clark-Tarlac Expressway, and full operation of Subic’s new container terminal and the Hanjin shipyard project, and you’d have an exponential growth in power demand here,” he said.

Arreza said the proposed 300-megawatt coal plant to be built near the Hanjin shipyard is designed to partly address the expected surge in electricity demand in Luzon.

“But we’ve been assured by the project proponent that it will also help bring down power cost in the Freeport, and that’s what the SBMA is primarily interested in,” he said.

The project, a joint venture of Aboitiz Power Corp.and Taiwan Cogeneration Corp., is scheduled for completion in 2011, with another 300-megawatt facility set to follow three years later.

Arreza said that with the expected influx of investments, a progressive power program has to be in place within a short period to maintain Subic’s momentum in investment generation.

“We have proven in the past two years that Subic can attract $1 billion in new investments each year. We were able to do that because the SBMA has been improving the facilities and systems in Subic for the past several years,” Arreza explained.

“This is really a very competitive business, and we’re playing hardball with more advanced economies like Singapore, Malaysia and Thailand,” he added. “Once your efforts to woo investors go slack for even just a moment, then you’d be left years behind.”

Because of this, Arreza said the upgrading and rehabilitation program to be undertaken by Subic Enerzone Corp. next year will also play a big part in Subic’s overall investment generation strategy.

The firm, a consortium formed by Aboitiz Equity Ventures, Davao Light & Power Co., Mirant Philippines, and San Fernando Electric Light & Power Co., is set to develop new substations, install new field and substation lines, improve switchyards, and install additional circuit breakers and power transformers.

Enerzone vice president and general manager Dante Pollescas said the firm has continuously improved its services since it started operation in 2003 -- promoting corporate professionalism while upgrading its distribution system to reduce overall system loss.

Accordingly, the firm’s system loss, which is a measure of a utility’s efficiency, has progressively fallen to the current four percent, Pollescas said.

As part of Enerzone’s distribution management services agreement (DMSA) with the SBMA, the firm had also upgraded three power substations and other facilities in the Subic Freeport this year.

These include a 25-MVA substation at Subic’s Cubi Point area, which was re-energized in October; a 27.5-MVA substation at Maritan Hill, also completed in October to provide reliable electric supply to companies in the nearby Subic Techno Park, one of the biggest industrial areas in the Subic Freeport; and another substation at Leyte wharf.

The substation upgrade projects consisted mostly of restoration or replacement of switch gears, installation of new power cables, and construction of take-off and by-pass structures.

By: Jess V. Antiporda - Journal Online