BPI Capital and Aboitiz Power ink innovative financing arrangement for Bukidnon hydroelectric plant
The PHP 10 billion loan facility will help support Mindanao’s growing power needs
In the photo are (L-R) Gabby Mañalac, Treasurer of Aboitiz Equity Ventures Inc.; Reggie Cariaso, Managing Director of BPI Capital Corporation; Manny Rubio, Executive Vice President and Chief Operating Officer of the Power Generation Group of Aboitiz Power Corporation; Edu Olbes, Executive Vice President of Security Bank Corporation; Rene Ronquillo, President and Chief Operating Officer of the Hedcor Group; Cezar P. Consing, President and Chief Executive Officer of Bank of the Philippine Islands; Luis Miguel Aboitiz, Senior Vice President of Aboitiz Power Corporation; Gerry Abrogar, Director of SB Capital Investment Corporation; Manuel Lozano, Chief Financial Officer of Aboitiz Equity Ventures Inc.; Willy Ng, Senior Vice President of Asia United Bank.
MAKATI CITY, METRO MANILA — In a landmark deal for Philippine debt capital markets, BPI Capital has arranged a syndicated loan of up to PHP 10 billion for the construction of a 68.8 megawatt run-of-river hydroelectric power plant in Manolo Fortich, Bukidnon. The deal, in partnership with Aboitiz Power subsidiary Hedcor Bukidnon Incorporated (HBI), marks the first-ever financing arrangement that funds a run-of-river hydroelectric project of this scale.
The project is the Aboitiz group’s latest foray into renewable energy in addition to its 22 existing hydropower plants. The Bukidnon project is among the run-of-river facilities under the Philippines’ Feed-in Tariff program of the Aboitiz Group.
BPI Capital’s financing arrangement for the Bukidnon hydroelectric plant is a milestone not just for the investment bank, but serves as landmark deal for the renewable energy sector in the Philippines. Previous similar mid-sized renewable energy projects were funded mostly by equity as borrowing cost was too prohibitive. And while commercial banks generally shied away from renewable energy projects that were deemed as more expensive sources of electricity compared to fossil based fuels, changes in the Feed-in Tariff’s regulatory framework and increased incentives have enhanced the project’s overall bankability.
BPI Capital’s pursuit of providing innovative, industry-leading financing solutions has allowed it to spearhead a syndicate of local banks to engage the fledgling renewable energy space. BPI Capital is the Issue Manager and Bookrunner for the project, with SB Capital Investment Corporation as Joint Lead Arranger and Asia United Bank as Co-Lead Arranger.
The project, which taps into the rich hydroelectric power base of Mindanao, will help support the region’s growing power needs. The Bukidnon project’s loan facility was signed in September 2015.
HBI was awarded Renewable Deal of the Year by the prestigious magazine Alpha Southeast Asia besting other entries from Southeast Asia. It is the first renewable deal of the year award to be given by said magazine.
BPI Capital was recently cited by Finance Asia, a leading Hong Kong-based finance publication, as the Best Investment Bank and Best Equity Capital Market House.
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BPI Capital is the most trusted transaction advisor, credit sponsor, and financing originator to the most respected businesses and corporations in the country. With a renewed optimism for the Philippines as an investment destination, BPI Capital is the leading partner in accessing opportunities in the Philippines for the development of an Asian private equity portfolio.