The AES Corporation has completed the $930 million purchase and transfer of assets of the 660 MW (gross) Masinloc coal-fired thermal power plant located in Barangay Bula, Zambales Province, Luzon, Philippines, the company said on Thursday. “This acquisition is a key component of our strategy to invest in areas where there is a significant need for new capacity and offers AES an excellent entry point into the growing Philippine economy through the lowest cost thermal plant in the system,” said Paul Hanrahan, AES president and chief executive officer. “This is a particularly attractive investment because the existing facility has the infrastructure in place to allow AES to add an additional 600 MW of generation capacity. As AES has done through similar acquisitions in other parts of the world, we expect to improve the overall efficiency and output of the existing plant, providing more reliable energy to the Philippine market.” AES and its eight percent minority partner International Finance Corporation (IFC) paid 100 percent of the purchase price upfront to complete the Masinloc transaction in one step. Including transaction costs and completion of a planned upgrade program to improve environmental and operational performance, the total project cost is estimated at $1,057 million. The transaction funding included $635 million in secured non-recourse financing comprised of a $240 million, 18-year facility from IFC, a $200 million, 15-year facility from Asian Development Bank, and a $195 million, 10-year facility from a consortium of banks including ING Bank, Security Bank, Bank of Philippine Islands and Rizal Commercial Banking Corporation. In addition, over $30 million of unsecured working capital facility commitments have been obtained from three local banks. “The impressive local and international group of commercial and multilateral lenders reflects not only the strong fundamentals of the project but also demonstrates the strength of the project finance market in Asia,” said Mark Woodruff, executive vice president and president of AES's Asia and Middle East region. Approximately 60 percent of the electricity generated at the Masinloc plant will be sold to electric distribution companies, cooperatives and special economic zones via power supply contracts of various tenors in place at the plant turnover. The remaining capacity will be sold through the wholesale power pool or under new contracts. AES provided the winning bid for the Masinloc facility in a privatization auction conducted by the Power Sector Assets and Liabilities Management Corporation (PSALM). Originally constructed in 1998, the plant utilizes coal from a variety of sources in the Pacific Rim. Through this acquisition, AES now operates the Philippines' first privatized thermal plant. AES has been operating in Asia since 1994. Today, AES's businesses in the region include electric utilities and generation facilities in China, India, Jordan, Oman, Pakistan, Qatar and Sri Lanka. AES has more than 5,000 MW of generation capacity in the region. AES is one of the world's largest global power companies, with 2007 revenues of $13.6 billion. With operations in 28 countries on five continents, AES's generation and distribution facilities have the capacity to serve 100 million people worldwide. __
