STEAG State Power Inc., the local subsidiary of STEAG AG of Germany, has finalized a total of US$210 million in primary loans from an international banking consortium led by the Kreditanstalt fur Wiederaufbau (KfW of Germany), the Japan Bank for International Cooperation and HypoVereinsbank AG to finance the construction of a power plant Mindanao.
The long-term loans are covered against political risks for the borrowed capital by the German Garantie fur Kapitalanlagen im Ausland (GKA) (US$100 million), JBIC (US$60.6 million) and Japan’s Nippon Export and Investment Insurance (NEXI) (US$40.4 million). In the Philippines, Banco de Oro provided a local peso loan of up to
R880 million (US$15.8 million).
Philippine Ambassador to Germany Delia Domingo-Albert met with STEAG AG last week on the occasion of the visit of Dr. Washington SyCip to Berlin from 25 to 26 November 2005. SyCip is Chairman of the board of STEAG State Power Inc. (SPI), which is owned 89 percent by STEAG AG, the fifth largest German power generator. The remaining 11 percent is owned by State Investment Trust Inc. (SITI).
A major German investment, the US$305-million power project involves the construction of a 210-MW coal-fired power plant in the PHIVIDEC Industrial Estate in Villanueva, Misamis covering an area of 55.42 hectares. The plant is expected to be commercially operational by December 2006.
This is the third power to be built by STEAG outside of Germany after Turkey and Colombia.
The company said there are about 2,700 workers employed on the Mindanao site, part of them experts of the contractor Kawasaki Heavy Industries, but the overwhelming majority of the workers from the region.
The project includes social and environmental dimensions as well, with SPI involved in the construction of housing, reforestation and vocational training for villages around the area.
The project is one of the biggest direct foreign investments in the region and a crucial energy infrastructure project for economic growth in Mindanao. Ambassador Albert expressed optimism that the project will spur further investments in Mindanao, including in mining and its related industries.
The company said that the project, being a major German investment in the Philippines, shows continued confidence by German investors in the country.
