Narrative
Full Description
Project narrative
On September 1, 2015, GN Power Kausawagan, Ltd. Co. (GNPK) — a special purpose vehicle and joint venture of Kauswagan Power GP Corp. (KPGPC) (87.5% ownership stake) and Kauswagan Power Holding Ltd. Co. (KPHLC) (12.5% ownership stake) — signed a 12-year, $435 million loan agreement with a group of Filipino (onshore) banks for the 552 (4 x 138) MW Lanao Kauswagan Coal-Fired Power Plant Construction Project. Then, on September 2, 2016, GNPK signed a Sinosure-backed $800 million loan agreement with a set of offshore banks, including China Development Bank and China Eximbank. Then, on July 4, 2016, GNPK signed a third syndicated loan agreement with a group of domestic and international banks (including Rizal Commercial Banking Corporation, Security Bank, Bank of the Philippine Islands, Development Bank of the Philippines, Cathay United Bank, Prudential Capital Group, Land Bank of the Philippines, United Coconut Planters Bank, and Bank of China) worth $765 million for the fourth power generation unit of the 552 (4 x 138) MW Lanao Kauswagan Coal-Fired Power Plant Construction Project (also known as the Lanao Kauswagan Coal-Fired Power Plant Expansion Project). Bank of China reportedly contributed $85 million to the $765 million loan. The proceeds from the three loans were to be used by the borrower to partially finance a commercial (EPC) contract between GNPK and Shanghai Electric Power Construction Co. Ltd., which was signed on May 15, 2014. The purpose of the project is the construction and development of a 552MW coal-fired power plant — with four 135MW power generation units — and a private port facility located in the Barangays of Tacub and Libertad in the Municipality of Kauswagan, and the Province of Lanao del Norte (exact locational coordinates: 8.18691, 124.11545). Shanghai Electric Power Construction Co. Ltd. is the EPC contractor responsible for project implementation. Site clearing work began in August 2013. Environmental permits for the project were issued in March 2014. The state grid operator, the National Grid Corporation of the Philippines, announced plans in January 2015 to build a new 230-kilovolt transmission line to connect the plant to the grid. A notice to proceed was issued to the EPC contractor on September 1, 2015. Unit 1’s completion date was originally expected and contracted to be on December 1, 2017. However, the project has encountered a variety of delays during implementation. As of September 2018, the construction of all four units was rescheduled for completion by December 2018. At that time, Unit 1 was expected to come online in March 2019, Unit 2 in May 2019, Unit 3 in June 2019, and Unit 4 in August 2019. Unit 1 was ultimately commissioned in June 2019. Unit 2 was ultimately commissioned in July 2019. Unit 3 was ultimately commissioned in December 2019. Unit 4 was ultimately commissioned in October 2020. Record ID#96053 captures the estimated financial commitment of China Development Bank, while Record ID#100790 captures the estimated financial commitment of China Eximbank.
Staff comments
1. The Chinese project title is 于菲律宾棉兰老岛的Lanao Kauswagan煤电项目 or 律宾考斯瓦根燃煤电 or 菲律宾考斯瓦根4×135兆瓦燃煤电厂 or 菲律宾考斯瓦根项目 or 的菲律宾考斯瓦根火电项目. 2. On November 12, 2013, KPHLC, together with Kauswagan Power GP Corp. (KPGPC), legally incorporated GN Power Kausawagan, Ltd. Co. (GNPK) as a project company. Some sources refer to it as a joint venture of AC Energy, the Philippine Investment Alliance for Infrastructure (PINAI) Fund, and Power Partners Ltd. 3. AidData assumes for the time being that China Eximbank and CDB are the only lenders that participated in the $800 million loan. This issue merits further investigation. 4. 4. The individual contributions of China Development Bank and CBD to the $800 million syndicated loan are unknown. For the time being, AidData assumes equal contributions ($400 million) across all 2 known members of the syndicate.