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January 28, 2008 |
The $380-million Magat hydropower privatization project financing, which was supported by a syndicate of foreign and local banks that included DBP, has won two international awards that further affirmed its standing as a milestone for power project finance, not only in the Philippines but also in Asia.
The Magat financing bagged the PFI Power Deal of the Year Award for Asia Pacific and the Best Project Finance/Best Privatization citation in The Asset-Triple A House and Deal Awards 2007.
Conferred by the prestigious PFI magazine that is considered the most authoritative information source for project finance professionals the world over, the PFI Awards are the ultimate recognition for achievement in project finance. The Triple A House and Deal Awards 2007, meanwhile is given out yearly by The Asset magazine, one of Asia’s leading finance publications.
According to the PFI Yearbook 2008, “Magat was the first power sector privatization to be successfully concluded with significant foreign participation… This is also the first major financing that includes a significant amount of long-tenor Philippine peso financing.”
The project financing was also cited for being the first financing in the country in which lenders analyzed and accepted electricity market risk. It was also recognized for its mixture of peso and dollar financing that provides cost efficiency and effective currency hedging, as well as the prompt completion of the project.
SN Aboitiz Power (SNAP), a joint venture between the Aboitiz Group and Norway’s SN Power, was declared the preferred bidder for the Magat hydropower project on December 14, 2006. The US dollar financing was provided by the International Finance Corporation and Nordic Investment Bank, while peso financing was provided by DBP, Banco de Oro Capital, HSBC, BPI Capital, China Banking, SB Capital, and PNB Capital.
The privatization was aimed at developing the country’s largest hydroelectric power plant located between Isabela and Ifugao provinces. The project has been hailed for reinvigorating foreign investors’ interest in the country’s power privatization program and supporting the capacity expansion of an environment-friendly energy source in the country. |
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