Subic Enerzone secures P100-M loan from DBP for capex

ABS-CBN News

Posted at Jun 20 2008 11:06 PM | Updated as of Jun 21 2008 07:06 AM

Aboitiz-led Subic Enerzone Corp. (SEZC) has obtained a P100-million loan from the Development Bank of the Philippines (DBP) to fund its capital expenditures for this year and refinance existing debts.

The 12-year loan will be paid in 48 equal monthly installments commencing at the end of the first quarter from the date of initial draw down and with a corresponding interest rate.

The Energy Regulatory Commission (ERC) approved the said loan, noting that this would be beneficial to SEZC's customers.

"A perusal of the evidence presented by SEZC showed that the loan, which shall be applied to finance additional capital projects under the distribution management services agreement (DMSA), as well as to refinance its existing term loan of P185 million with DBP, will benefit consumers in terms of continuous, reliable and efficient power supply as mandated by Republic Act 9136," the ERC said.

Subic Enerzone is a consortium composed of Aboitiz Equity Ventures, Davao Light & Power Co., Aboitiz Power Corp. and San Fernando Electric Light & Power Co.

The utility is contracted to provide power distribution services to the Subic Bay Metropolitan Authority (SBMA) until 2028. The company pays SBMA P40 million annually for the lease of power facilities and other properties.

Under the DMSA, SEZC shall invest some P368 million within the first five years of the service period to rehabilitate the existing power distribution system at the Subic Freeport Zone.

In September last year, the ERC approved SEZC's capital expenditures, amounting to P210.27 million. These covered the acquisition of machines and equipment, installation of distribution meters as well as upgrade of its facilities and system lines.

The company has listed 21 projects under its application with the ERC. Of the number, 11 of were already completed while 10 are still ongoing. The current projects are estimated to cost P179.94 million.