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The Metrobank group of the tycoon George Ty is taking part in two new major power generation projects in the provinces of Iloilo and Cebu in the Visayas region worth an estimated P34 billion as part of its strategy to invest in vital infrastructure in these key growth areas.
Metropolitan Band and Trust Co. (Metrobank) chairman Antonio Abacan Jr. told the Philippine Daily Inquirer that the group was set to build an additional 160-megawatt capacity for Panay Power Corp. in Iloilo and would also participate in the 240-megawatt expansion of Cebu Power Corp.
Panay Power is owned by Metrobank group’s Global Business Power Corp. (Global Power) and First Metro Investment Corp., while Cebu Power is a four-way venture among the Metrobank group, the Aboitiz family, Vivant Energy Corp. and Global Formosa.
Other industry sources privy to the financing of the projects said the total cost of the project in Iloilo, in Panay Island, was about P14 billion and the Cebu project, P20 billion.
The sources explained that P14 billion, or 70 percent, of the Cebu project’s total cost would be funded through borrowings, while the rest would be funded by equity from the four partners.
On the other hand, the sources said the Metrobank group was looking for a partner for the Panay project. Of the total project cost, the sources estimated that P10 billion would be covered by a project finance loan.
Asked whether the Metrobank group was keen on bidding for power generation assets being privatized by the government, Abacan said: “If there are opportunities we will go for it, but right now our focus is Iloilo and Cebu.”
He said the expansion would add to the existing capacity of the group’s power generation interests of about 200 megawatts in Cebu and another 100 megawatts in Panay.
Abacan said the Metrobank group was focusing on these two areas because there were already too many players in Luzon. He said rising demand for electricity in those areas was quite evident.
“In Cebu, new hotels are coming out. Under the time of [President Gloria Macapagal-Arroyo], Cebu is booming. We ourselves own a hotel in Cebu, the Marco Polo. We’re the one supplying (power) to the island of Cebu and the neighboring provinces,” Abacan said.
“It’s the same with Iloilo. We’re supplying power to Boracay. The island of Panay is the last in the (power) grid so if there’s no improvement, there will be frequent power outages there,” he said.
He added that Iloilo was now being developed as a business process outsourcing hub, thus creating additional demand for electricity.
