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Infrastructure & PPPs in Philippines - Q3 2022 Update

PHILIPPINES continues to push PPPs for infrastructure development under new political leadership, with a defined project pipeline. including via unsolicited route. The clean & renewable energy sector has seen bilateral negotiations on G2G level, new mini-grids being awarded, project finance through bonds and secondary market transactions (e.g. JVs) with international players.

Read more about key developments in Infrastructure and PPPs in Philippines in our latest insight.

 

July 2022

AYALA GROUP PLATFORM PLANS BONDS SALE FOR SOLAR DEVELOPMENT

Philippines-based AC Energy Corporation is looking to launch a bonds issue of up to PHP 10 Bn (USD 179.1 Mn) to finance the expansion and development of three solar parks. The PSE-listed energy platform of the Ayala Group said that the sale will be part of a PHP 30 Bn issue, to be taken up in tranches. The fixed-rate bonds, maturing in five years, will be listed on the exchange.

The capital will be allocated for the expansion of the Arayat-Mexico Solar and Cagayan Solar I projects, as well as the first phase of the San Marcelino Solar Project/Transmission Line.


PHILIPPINES CONSIDERS ACCEPTING UNSOLICITED PROJECT PROPOSALS

The Philippines government, under newly-elected President Ferdinand Marcos Jr, is considering accepting unsolicited proposals for infrastructure projects as it turns to public-private partnerships (PPP) to create fiscal space amid elevated debt levels.

Some airports such as the Bohol International Airport will be available for unsolicited or solicited bidding, which would involve the private sector maintaining and operating it.

Aboitiz Infra Capital, a unit of Philippines-based conglomerate Aboitiz Equity Ventures, has a pending PHP 19.75 Bn (USD 359 Mn) unsolicited proposal to operate, maintain and expand the airport in Bohol.

The other pending unsolicited airport proposals under the PPP program, according to the PPP Center website, are:

  • The PHP 199.41 Bn, 50-year Integrated Development Plan for Mactan Cebu International Airport by GMR-Megawide;

  • The PHP 50.75 Bn proposal to develop, operate and manage the Davao International Airport by Chelsea Logistics Holdings Corp;

  • The PHP 12.12 Bn proposal to develop, operate and manage the Bacolod-Silay Airport by Udenna Infrastructure Corp;

  • The PHP 3.84 Bn proposal to operate, maintain and upgrade the Kalibo International Airport by Mega 7 Construction;

  • The PHP 1.35 Bn proposal to operate and maintain the Francisco B. Reyes Airport and the New Busuanga Airport byUdenna; and

  • The PHP 45.75 Bn proposal to upgrade, expand, operate and maintain Laguindingan Airport.

The DBCC’s medium-term target shows that the government plans to keep infrastructure spending above 5% of gross domestic product, peaking at 6.3% in 2028.


PHILIPPINE PROVINCE PROPOSES BULK WATER SUPPLY PPP PROJECT

Negros Occidental is looking to establish a bulk water supply facility along the Imbang and Malogo rivers in Silay Cityunder the public-private partnership (PPP) route. The provincial government's plan consists of establishing the maiden facility along the two major rivers. Governor EugenioJose Lacson will commence the construction of a single bulk water project over the next three years.


August 2022

US COMMITS TO PHILIPPINES CLEAN ENERGY TARGETS

The United States will help the Philippines achieve its clean energy goal to produce 35% of its power from renewable sources by 2030 and 50% by 2040. America's assistance through projects such as the United States Agency for International Development’s Energy Secure Philippines Initiative, a five-year programme worth USD 34 Mn that aims to mobilize more than USD 750 Mn of private-sector investment to support up to 500 MW of clean energy generation.

US Trade and Development Agency awarded a grant to Philippines-based Aboitiz Renewables for a feasibility study to develop offshore wind projects. The project is expected to produce up to 3 GW of clean energy, providing power to more than two million households.


PHILIPPINES’ CAVITE TO AWARD AIRPORT PROJECT

Cavite province in the Philippines is expected to grant a consortium of domestic and international firms the Sangley Point International Airport (SPIA) project. House of Investments, part of the Yuchengco group of companies, confirmed that the Virata-Yuchengco-led SPIA Development Consortium is poised to win the contract to build and operate the USD 11 Bn project, following the conclusion of the provincial public-private partnership selection committee's 60-day Swiss challenge.


DoTr TO OPERATE FOUR AIRPORTS UNDER PPP IN THE PHILIPPINES

The Department of Transportation (DoTr) will operate four major airports in the Philippines under the public private partnership (PPP) model. Private companies are invited to Participate in the development, operations, and maintenance of the New Bohol, Davao, Iloilo and Kalibo airports.

Some of the companies that have experienced interest in the privatization of airports are the Aboitiz Group, Philippine Airport Ground Support Solutions Incorporated, Chelsea Logistics and Infrastructure Holdings Corporation, Mega7 Construction Corporation, Prime Asset Ventures Incorporate and Udenna Infrastructure Corporation.

The DoTr is also considering launching bids for the development and rehabilitation of the Ninoy Aquino International Airport (NAIA). The PHP 102 Bn airport rehabilitation project will aim to relieve air traffic congestion at the main gateway and resolve capacity constraints.

The agency has received proposals from Megawide Construction Corporation and GMR Infrastructure Limited to upgrade NAIA under a USD 3 Bn contract valid for a period of 18 years.


JV TO BUILD A 68 MW AC SOLAR FACILITY IN ILOCOS NORTE

A joint venture (JV) company comprising Singapore-based Vena Energy and Meralco PowerGen Corporation (MGEN) have commenced construction on a 68 MWac solar facility in the Ilocos Norte province, Philippines. Solar energy generated will be used to power houses in the municipality of Currimao.

The solar power project will support the Government of the Philippines’ aim of increasing the share of renewable energy (RE) in the country’s total capacity to 35 per cent by 2030 and 50 per cent by 2040.

MGEN, a subsidiary of Manila Electric Company (Meralco), aims to diversify its power generation portfolio, of which between 500 MW and 600 MW will be RE plants.


SOLAR PHILIPPINES TO CONSTRUCT 4 GW OF SOLAR FARM IN NUEVA ECIJA

Solar Philippines Nueva Ecija Corporation (SPNEC) announced plans to add a new 3.5 GW solar farm to its flagship 500 MW project on Luzon island. The first 50 MW and the transmission for 500 MW are under construction. The company also wants to purchase another 2,500 hectares in Bulacan and Nueva Ecija to expand its original project eightfold.

SPNEC will use the proceeds of various capital raises to purchase the land for the extension to 3.5 GW. The company also stated that this clustering of projects would benefit from the transmission infrastructure already in place in the area. It will connect over 60 km to NGCP’s substations that supply the Greater Manila Area.


September 2022

PHILIPPINES PLANS NEW CLARK CITY SOLAR PPP

A government-owned conglomerate of the Philippines is seeking to launch a tender for a solar project in New Clark City in the Q4 2022. The Bases Conversion and Development Authority (BCDA) is looking for an investor who can develop a large-scale plant on a plot of land measuring 36 hectares.

The winning developer should have the flexibility to determine the exact capacity and cost of the project. The initial lease period will be for 25 years and can be renewed for another 25. The project is being planned to meet the energy requirements of New Clark City as well as supply power to the grid.


PHILIPPINES SEEKS INVESTORS IN RENEWABLES AND BRIDGE PROJECTS

A local government agency of the Philippines is seeking investors in renewable energy projects in the Subic Bay Freeport Zone on the west coast of the island of Luzon. The Subic Bay Metropolitan Authority (SBMA) is open to investments in wind and solar farms in the area, which is part of the Development of Redondo Peninsula Project.

The Development of Redondo Peninsula Project will cover an area of about 1,500 hectares, without elaborating on the total capacity of renewable projects the government is seeking for the area.

The SBMA is also seeking an investor in Redondo Link Bridge, which has an estimated value of USD 400 Mn – USD 1.4 Bn. The proposed bridge spanning approximately 6.4 km will connect the Subic Port District and the Redondo Peninsula, which can improve the connectivity for the Subic Special Economic Freeport Zone (SSEFZ).


PHILIPPINES CITY PLANS CAR PARK PPP

The city government of Baguio in the Philippines is considering using the PPP model to build multi-level car parks to cope with rising traffic. Investors will be invited to bid for projects if they cannot be funded by the city.

The authorities have identified seven suitable areas for multi-level parking. The areas include a city-owned property in the public market and the proposed site of the city’s creative centre. Baguio, which is on the same island as the Philippine capital Manila, has a population of around 350,000.


PHILIPPINES AUTHORITY SEEKS INVESTORS FOR SAN RAMON PORT PROJECT

Government authority in the Philippines is seeking international investors for a new port project in the southern Zamboanga Peninsula.

The San Ramon Newport will help boost trade for local agricultural and industrial goods such as rubber and seafood. The project will cost an estimated USD 207 Mn. The facility will serve the peninsular area and surrounding provinces, handling spill over cargo traffic from the Zamboanga Base Port, mostly comprising of sardines from neighbouring canning factories.

The port will have an estimated total berth length of 580 metres with a capacity to accommodate New Panamax-sized vessels of up to 7,000 twenty-foot equivalent units (TEU). It will carry a 40-year concession, will be built in three phases and will have quays, warehouses, more than 9.2 hectares of container yards, breakwater facilities and other supporting infrastructure. The construction period is 3 years.

PHILIPPINES PROVINCE ACCEPTS SAN MIGUEL’S UNSOLICITED EXPRESSWAY PPP PROPOSAL

The Cavite provincial government in the Philippines has accepted an unsolicited proposal from San Miguel Holdings (SMHC) to build, operate and maintain a toll road. The 27 km stretch will run through the municipalities of Silang, Amadeo, Tagaytay, Indang, Mendez and Alfonso in Cavite and Nasugbu in Batangas province.

SMHC was awarded original proponent status and the two sides signed an agreement. Cavite will now begin the Swiss Challenge process in line with its rules on public-private partnerships.


AYALA’S ACEN RAISES USD 171 MN DEBT FOR RENEWABLES PUSH

ACEN has issued PHP 10 Bn (USD 171.2 Mn) in fixed-rate green bonds, the listed energy platform of Philippines conglomerate Ayala. The proceeds will finance its renewables projects in the Southeast Asian nation - including the 283 MWdc San Marcelino Solar I farm in Zambales and the 42 MWdc expansion of the 72 MWdc Arayat Mexico solar farm in Pampanga - as well as the construction of the 133 MWdc Cagayan solar farm in Lal-lo, Cagayan.

The peso bonds, issued as part of ACEN’s PHP 30 Bn debt securities program, have a fixed annual interest rate of 6.0526% for a five-year tenor. They are listed on the Philippine Dealing and Exchange platform.

ACEN plans to achieve 20 GW in renewables capacity by 2030. The company and its majority shareholder, AC Energy and Infrastructure, have raised USD 1.6 Bn from green bonds since 2019 to fund their renewables investments.


MAHARLIKA CONSORTIUM TO DEVELOP SOLAR MICROGRIDS IN PHILIPPINES

A consortium comprising WEnergy Global Private Limited (WEG), Maharlika Clean Power Holdings Corporation (MCPHC) and CleanGrid Partners Private Limited (CGP) has secured a contract to build 16 microgrids with solar power components in the Philippine province of Palawan.

The Maharlika consortium, through special purpose vehicle (SPV) Archipelago Renewables Corporation, has signed a Qualified Third Party (QTP) service contract to build these microgrids. The microgrids are expected to power more than 7,100 households across seven municipalities covered by the Palawan Electric Cooperative (PALECO).

The distribution network includes 175 km of primary and secondary power lines that will be powered by 3.8 MWp solar photovoltaics (PV) and 2 MW diesel generators. The microgrids will also utilize 4.2 MWh of batteries.


MACQUARIE CAPITAL IS INVESTING USD 1.2 Bn IN A FLOATING SOLAR PLANT THROUGH BLUE LEAF ENERGY

Through Blue Leaf Energy Asia Pte Ltd. in Singapore, Macquarie Capital is investing at most USD 1.2 Bn in a floating solar power plant of 1,300 MW on Laguna Lake. Blue Leaf Energy and SunAsia Energy will jointly develop the solar facility. It is expected to be operational by 2024.

Oliver Lewis, Macquarie Capital, signed a letter confirming the commitment to invest. Blue Leaf Energy and SunAsia Energy negotiated a memorandum to jointly develop the solar facility in June 2021. The agreement will see the floating solar panel installed on Laguna Lake’s water surface, between Calamba, Cabuyao, Sta. Rosa as well as the towns of Bay & Victoria.

 

List of key transactions - Philippines Q3 2022



Source: YOG INFRA analysis, Public Information

 

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