Masinloc plant aims to start expansion in early 2008

The 600-megawatt Masinloc coal-fired power plant in Zambales may start work on doubling its output in 2008, pending approval of the project. Masinloc Power Partners Co. Ltd (MPPC), which won the bid for the Masinloc plant at $930 million last July, fully intends to expand the capacity of the plant to another 600 megawatts, according to Matthew Bartley, president and chief executive officer of AES Philippines Corp. MPPC is a subsidiary of US-based AES Corp., which has 128 power facilities in 29 countries and a total of 42,000-mW generation capacity. AES is also engaged in wind, hydro, and gas power plants. The MPPC hopes to start expansion of the plant in the first quarter of 2008, according to Bartley. "We are very excited to contribute to its growth," Bartley said. For the expansion, the company was looking at spending another $1 billion – without any partner to help in financing the expansion. Masinloc, Bartley explained, is a 100-percent AES venture and at this time partners are not necessary. The total project cost for the Masinloc facility is estimated at approximately reached to $1.1 billion, which includes the acquisition price, funding for the debt service reserve account, transaction costs, refurbishment works, and initial working capital needs. The 40 percent up-front payment which AES needs to pay to Power Sector Assets and Liabilities Management Corp. (PSALM) will come from internally generated funds. The rest will be sourced from both international and local banks including the International Financial Corp. (IFC). "We are working now some international and local banks to finance the expansion," Bartley said. He added that they are also expecting to finally complete the transactions with PSALM by the middle of December. "We expect it [close the transaction] in the next month or two or in the first quarter of 2008," Bartley said in a briefing with reporters. - GMANews.TV