Business

Energy World Corporation secures financing with Development Bank of the Philippines

Friday, April 11, 2014    

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Energy World Corporation (EWC), the parent of Energy World International (EWI) has secured project financing with the Development Bank of the Philippines for its operations in that country.

The renown Standard Charted Bank has been appointed as financial advisors to EWC in respect of the project financing for its Philippine projects.

Hong Kong based-EWI and the Jamaica Public Service Company (JPS) earlier this year formed a Power Purchase Agreement (PPA) which in effect green lights the base load capacity project.

EWI won the government's bid to provide 360 megawatts of energy to the national grid. The PPA was approved by the Office of Utilities Regulations (OUR).

The 20-year PPA becomes effective on the issuance of a licence to supply electricity generating capacity to EWI. EWI is required to post a 5 per cent bond of US$37 million. Construction of the Jamaican plant is expected to begin this year and be completed within two years.

Energy Minister Philip Paulwell has said that he will be issuing a licence to EWI on the recommendation of the OUR.

Concerns have been expressed in Jamaica about EWI's ability to finance this project and Opposition spokesman on Energy, Karl Samuda has urged the minister to be cautious and subject EWI to a thorough due dilligence excercise.

What is clear now is that EWC has now agreed a mandate and term sheet with the Development Bank of the Phillippines (DBP) for project financing of its Phillippines LNG Hub Terminal and Power Station. The mandate and term sheet with the DBP were signed in Manila on Friday 28 February 2014, according to a letter shown to Caribbean Business Report.

The value of the project debt is around US$550 million. DBP will partially underwrite this financing and arrange for syndication amongst local lenders.

Stewart Elliott, CEO and Chairman of EWC said, "We are extremely pleased to announce this important financing milestone for our Philippines projects, which represents a strong statement of support for EWC's strategy to bring clean and green energy to Asia by one of the Philippines' leading financial institutions. We look forward to working in close cooperation with the DBP and other local and international lenders in finalising this project financing transaction in the coming months."

EWI has been viewed with suspicion and many questions have been asked of its lead principal, Stewart Elliott.

Caribbean Business Report has uncovered that EWI is controlled by Stewart Eliott and owns 334,572 million shares of EWC. EWC which is a publicaly listed company is also controlled by Elliott. Elliott controls over 639 shares of EWC. EWI is engaged in the business of developing, constructing and operating in property, infrastructure, power generation and electrical energy-related projects.

The Jamaican government can activate a stipulation allowing it to take over the proposed gas-fuel plant and pay only 50 per cent of its market price, if EWI is unable to complete the project, or fails to comply with set criteria.

The government can also acquire 15 per cent of the plant free of cost after 20 years of operation. Minister Paulwell has seen to it that there are in-built safeguards protecting the government.

EWI has said it is able to supply more than 300,000 tonnes of liquidfied natural gas (LNG) that will be required annually to fuel the 381-megawatt electricity facility.

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