IFC considers financing power portfolio in the Philippines

The private investment arm of the World Bank, the International Finance Corporation (IFC) is considering financing a portfolio of power projects to be developed by ThomasLloyd Group (TLG) and Bronzeoak Philippines (BP).

The US$476.5 million proposed portfolio will support the phased development and operation of a 155MW portfolio of co-located greenfield solar photovoltaic (PV) power plants with a total of 85MW and biomass power plants with a total of 70MW at three locations in Negros, Philippines. The projects would benefit from the co-location of intermittent and base-load power that would contribute to grid stabilization and achieve economy of scale derived from each co-located project using the same technology and engineering, procurement and construction (EPC) thus being replicable.

The proposed investment includes the first utility-scale solar PV projects in the country and the first biomass project in the world utilizing sugar cane trash. The first solar PV project was already commissioned in May 2014.

ThomasLloyd Group (TLG) is a European based renewable energy-focused private developer/investment company. Founded as a boutique investment bank, TLG has shifted its focus to developing and financing renewable energy projects with the inception of a US$100 million ThomasLloyd Cleantech Infrastructure Fund GmBH (TLCTI) in 2011.

Founded in 2003 by Zabaleta & Co., Bronzeoak Philippines (BP) is a renewable energy project developer with in-depth biomass experience. Originally, a prominent sugar cane farmer, the Zabaleta family has historically been involved in sugar cane farming in Negros, the largest sugarcane region of the Philippines.

The four solar PV projects at the three sites will be undertaken by San Carlos Solar Energy, which will be owned 60% by BP and 40% by TLCTI. Each of the three biomass projects is undertaken by individual SPVs, each owned 65% by BP, 35% by TLCTI, and the remaining 5% by WBE (Hong Kong) International Green Energy Limited (WBE), an international investment arm of Wuxi Huaguang Electric Power Engineering Co., Ltd., a Chinese boiler manufacturer providing the EPC

The total project cost is estimated at US$476.5million. The proposed IFC investment is up to

(i) US$117.5 million from its own account;

(ii) US$88.1 million from IFC in its capacity as implementing entity for the Managed Co-Lending Portfolio Program;

(iii) a Clean Technology Fund (CTF) senior loan from IFC in its capacity as implementing entity of the CTF; and

(iv) a Canada Climate Change Program (CCCP) senior loan from IFC in its capacity as implementing entity of the CCCP.

The sponsors are developing the co-located solar PV and biomass projects at three locations in San Carlos City, La Carlota City, and Manapla City in Negros Island, Philippines. All these sites are in the heartlands of sugarcane farming, which are ideal for solar PV projects: the climatic conditions and terrain characteristics for sugarcane growing happen to be also suitable for solar PV - relatively high annual irradiance, flat terrains, and minimal shading obstructions.

In July the joint venture announced it had secured bridge financing from the Ayala-owned Bank of the Philippines (BPI) to finance the PV project located in San Carlos City.