Alcantara power firm to tap new loans

Published July 26, 2020, 10:00 PM

by Myrna M. Velasco

 Alcantara-led Alsons Consolidated Resources Inc. (ACR) will be securing new loans to bankroll the equity portion of its project funding, primarily for the P16 billion Zamboanga coal-fired power facility that it will be advancing to construction next year.

ACR Executive Vice President Tirso G. Santillan Jr. said the company will be tapping the long-term fund market for such purpose. “We have been financing our projects through project loans from banks…specifically for equity funding,” he said.

Development of power projects often leans on a 70:30 debt-to-equity ratio, and this is a project implementation trajectory that most power firms have been adopting in their power plant constructions.

Alsons is similarly exploring option on the issuance of convertible preferred shares as another form of capital raising activity for the company.

The power investment group of ACR indicated that it will award by third quarter this year the engineering, procurement and construction (EPC) contract for its San Ramon Power Inc. (SRPI) coal-fired project in Zamboanga City.

The company has previously shortlisted two foreign firms via its EPC tender – namely: Northeast No.1 Electric Power Construction Co. Ltd. (NPEC), which is a wholly owned subsidiary of China Energy Engineering Group; and Shandong Electric Power Construction Company (SEPCO III), a subsidiary of Power Construction Corporation of China.

Upon firming up the selection of the EPC contractor, the Alcantara company noted that the notice-to-proceed will be served next in line with the targeted construction kick-off in the early part of 2021.

The thermal power facility is scheduled to reach commercial operation date (COD) in 2023; and its generated electricity shall be delivered to Zamboanga City and nearby areas.

The San Ramon coal-fired power plant is one of the two major projects of the company advancing at implementation phases despite the constraints posed by the niggling coronavirus pandemic – the other is its 14.5MW Siguil run-of-river hydropower project in Maasim, Sarangani, which is eyed to reach commercial operations in 2022.

As reckoned by ACR Chairman and President Tomas I. Alcantara, “a new normal has been created and we all live under its conventions,” hence amid adversities, he noted that “as I said last year, we grow as we go.”

In parallel, Santillan highlighted in his report during the company’s annual stockholders’ meeting last week that “in these difficult times for our people and the rest of the world, your company will carry its share of the burden in order to help bring about recovery and revival.”

Anchoring his report on “Sharing the Pain under the New Normal” theme, Santillan guaranteed that “the company’s various power projects remain on-track to begin commercial operations,” mainly because of the quick recovery of Mindanao from the scourge of the health crisis.

He thus stressed that the company’s plants will “continue to operate and supply power to our customers even as we continue to try our best to help the power distributors and consumers who have been adversely affected financially by the pandemic.”

The company currently has 468 megawatts of power capacity, and that scale of portfolio makes it one of the biggest power producers in Mindanao grid.

Its recently completed major power project is the US$570 million Sarangani Energy Corp (SEC) coal-fired facility, which is now supplying 210MW to off-taker utilities in various parts of Mindanao.

The Sarangani plant is similarly hailed as a significant income-driver for the Alcantara firm, especially after the completion and commercial operations of its second unit of 105MW capacity in 2019. The first unit of the same capacity had been on-line since 2016.