London, 3rd March 2014. ThomasLloyd Group Ltd and International Finance Corporation, a member of the World Bank Group, today signed a mandate letter for the provision of $330 million of senior debt through the Managed Co-Lending Portfolio Programme and other associated IFC funding facilities. This will augment the $87 million of development and construction capital already deployed or committed by the ThomasLloyd Group of companies and the ThomasLloyd Cleantech Infrastructure Fund (together ThomasLloyd). Together funding will be used to construct and operate a portfolio of three solar facilities and three biomass facilities on Negros island in the Philippines. Both parties envisage this transaction as the platform for expanding investment in this sector.
ThomasLloyd has been advising and financing the development of renewable energy facilities in the Philippines for 5 years through a joint development agreement with its local development partner, Bronzeoak Philippines Inc. In March 2014 it will finish the construction of San Carlos Solar Energy Inc., a total of 22MW of solar capacity and fully financed by ThomasLloyd. This will be the first utility scale renewable energy project built in the country to take advantage of the Feed-In-Tariff introduced by the government under the 2008 Renewable Energy Act. Two more solar projects on Negros island are already under development, the first of which will also be constructed in 2014.
Alongside these projects, ThomasLloyd has also financed the development and construction of San Carlos Biopower Inc., a 19.99MW biomass to power facility, which will primarily use the sugar cane waste from the local farming community. This is due to complete construction later this year under an EPC and Maintenance contract with Wuxi Huahuang of China. A further two biomass projects will be built in the southern and northern parts of Negros island within the next 2 years using the same technology.
The development and construction of these facilities have already created more than 1,000 jobs in the local community, which will further increase significantly as the portfolio grows. Power generated will serve households and businesses, as part of ThomasLloyd’s key investment criterion: “local production for local consumption”. The biomass facilities will also give local farmers a large-scale alternative use for agricultural waste, which has historically been burnt in the field. This will comply with the Philippine Clean Air Act.
For ThomasLloyd, Tony Coveney, Executive Director and Head of Project Finance said, “The Philippines provided a great opportunity for both us and the IFC to bring permanent jobs and sustainable energy supply to the country. We believe that targeted use of capital can work to create local power for local communities.”
Michael Sieg, Chairman and CEO of ThomasLloyd, added, “We have steadily built our commitment to investing in the Philippines and were delighted to share our 4th Annual Cleantech Congress in January 2014 with representatives from the government. Our mandate with the IFC gives us the opportunity to extend our plans for more power facilities. These will continue to create economic growth and prosperity especially to rural communities.”
IFC Resident Representative Jesse Ang said, “The development of renewable energy sources is a priority program for IFC in the Philippines, which pays the second highest prices for electricity in Asia after Japan, and is highly vulnerable to the effects of climate change. These projects in the island province of Negros support the World Bank Group’s global efforts to create more jobs to help reduce poverty particularly in provincial areas where it is more pronounced. Finally these projects provide an important “on-island” power resource for Negros island and the Visayan grid which has suffered brownouts due to power facilities being negatively impacted by Typhoon Haiyan.”