ASEAN POWER GRID (APG) FINANCING OPTIONS

The Joint Meeting with The Joint Meeting with APG Consultative Committee (APGCC) APG Consultative Committee (APGCC)

ASEAN Power Grid Financing OptionsASEAN Power Grid Financing Options

Working Group No. 6Working Group No. 6Resources DevelopmentResources Development

26 February 200826 February 2008IndonesiaIndonesia

Thana BoonyasirikulElectricity Generating Authority of Thailand

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ASEAN POWER GRID (APG) FINANCING OPTIONSASEAN POWER GRID (APG) FINANCING OPTIONS

Financial Proposal for the ASEAN Interconnection Projects

Cambodia, Indonesia, Malaysia, Philippines and Thailand

Financing Models of the Existing Interconnection Projects - Cambodia

Financing Option Project Name Budget Scope of Work

ADB Loan

GMS Transmission (ADB Loan No.2052-CAM(SF) & NDF Credit No.425

- ADB = 30,941,000 SDR

44,300,000 USD

- NDF = 10,000,000 EUR

- Govt. = 11,070,000 USD

• Component 1 : Transmission Line 230 kV : 110 km

• Component 2 : Substation : 230 / 115 kV

WB Loan

GMS Power Trade (Grant No. H301-OKH)

- IDA = 18.500 million

USD

-RGC = 3.697 million

USD

•Component 1 : 115 kV Transmission System : Stung Treng Province to Lao PDR Border

• Component 2 : 115 kV Transmission System : Viet Nam Border to Kampong Cham Province

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Financing Models/Options of the Interconnection Projects – Indonesia

Project Description Utilities Involved

Status Financing Models / Options

Description

SUMATERA (INDONESIA) – PENINSULAR (MALAYSIA)

Sumatera – Peninsular Malaysia (HVDC)

WEST KALIMANTAN (NDONESIA) – SARAWAK (MALAYSIA)

1). West Kalimantan – Sarawak 275 KV Interconnection

PLN

TNB

PLN

SEB

• Feasibility Study completed in January 2005.

• Study on Cross Border Issues (Financial, Tax, and Legal) and Project Structure completed by January 2007

• Detail F/S and Basic Design 275 kV Transmission for Indonesia side by PLN, completed in 2003

• Trans Borneo Power Grid Development and Energy Trading Study, in whole Borneo (Kalimantan) completed in 2004

• Proposed:

in 2011 SEB sell 100 MW to PLN

in 2013 SEB sell 200 MW to PLN

proposed: JV between PLN and TNB

proposed: Malaysia Side by SEB

Indonesia side, two options:

1. ADB

2. PLN budget

Next steps: Review PDP (Power Development Program) of both countries, Detail Survey and Design for the Transmission, Funding.

- Next steps: Study of common operation procedure, Review Power Development Program of both countries, Detail survey and Design for the transmission, Funding.

- Interconnection between Mambong S/S (Sarawak) to Bengkayang S/S or Ngabang S/S (West Kalimantan)


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Financing Models/Options of the Interconnection Projects – Indonesia (cont.)



Description

WEST KALIMANTAN

(INDONESIA) – SARAWAK (MALAYSIA)

2). Supply to Border Villages of West Kalimantan thru 20 kV distribution line

PLN

SEB

• Both countries agreed to proceed discussion on commercial issues under B to B basis.

• Discussion of common operation procedure and tariff structure are on going. It is expected to be in operation on Dec 2008

PLN’s budget

.

Badau and Sajingan villages in Indonesia side to be supplied by SEB through the distribution network.

In Malaysia side, PLN will pay connection fee to SEB as developer and in Indonesia side, PLN develop distribution network to the country border


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Financing Models/Options of the Interconnection Projects - Malaysia



Description

Peninsular Malaysia - Singapore

TNB

SPPG

• Commissioned in 1985.

•The interconnection is between Plentong 275kV substation in Johor Malaysia and Upper Jurong 230 kV substation in Singapore.

Bilateral G to G

The responsible authorities/utilities of both countries will invest and financing the project (s) up to their border.

Malaysia:

-TNB Self-

FinancingPeninsular Malaysia - Sarawak

TNB

SESCo

•Detailed technical studies are currently being undertaken in view of implementing the HVDC interconnection between Sarawak and Peninsular Malaysia for transferring 1600/2000 MW power from Bakun to Pen. Malaysia.

•The 1st stage of the 800/1000 MW power transfer is targeted for completion in 2013/14.

Financial evaluations are in progress.

(SPV + TNB/SESCo)


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Financing Models/Options of the Interconnection Projects - Philippines

Name of Project / Project Description Financing/Loan Type Terms and Conditions

1. Leyte-Luzon International Project

The project involves the installation of the following to transmit 440 MW to the Luzon Grid through a HVDC transmission network:

Submarine Cable : 23 kms.

Transmission Line : 468 kms. 230 KV

Converter Station : 2-440 MW Monopolar

Forex Portion:

Co-financing between EXIMBANK & World Bank/ODA

Local Portion:

Internal Cash Generation

EXIMBANK Loan:

Interest Rate (%) 35%

Commitment Charge .25

Maturity/Terms 20 years including

5 years grace

period

World Bank Loan:

Interest Rate (%) Cost of Qualified

Borrowing (CQB)

Commitment Charge .25%


5 years grace

period


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Financing Models/Options of the Interconnection Projects – Philippines (cont.)


2. Leyte-Bohol Interconnection Project

Stage I involves the installation of the following initially energized at 69 KV and capable of transmitting 40 MW:


Transmission Line : 73 kms. (69 KV & 138 KV)

Substation : 1-50 MVA Power Transformer

1-5 MVA Power Transformer

6-138 KV PCB

12-69 KV PCB

3-13.8 KV PCB

1-15 MVAR Shunt Reactor

3-10 MVAR Capacitor Bank

8-5 MVAR Capacitor Bank

Forex Portion:

Stage 1 – Overseas

Economic and Fund Economic (OECF)/ODA

Stage 2 – Japan Bank for International Cooperation (JBIC)/ODA

Local Portion:

Stage 1 – OECF/ODA

Stage 2 – JBIC/ODA

ICG

Interest Rate (%) 2.7% per annum on the

Principal Disbursed for

equipment/materials &

associated services

charges and 2.3% per

annum on the Principal

Disbursed for consultancy

& associated services

charges

Commitment Fee None

Service Charges 0.1% of the amount

of Letter of

Commitment/Disbursed

Amount

Maturity/Terms 30 years including 10

years grace period


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3. Leyte-Cebu Interconnection Project

The project involves the installation of the following to transmit 200 MW from the Leyte Geothermal to augment the power demand in Cebu:


Transmission Line : 324 kms. ( 230 KV)





24-230 KV PCB

21-138 KV PCB

1-69 KV PCB

Forex Portion:

World Bank/ODA

Local Portion:


Interest Rate (%) Cost of Qualified

Borrowing (CQB)

Service Charges 0.1% of the amount

of Letter of

Commitment/Disbursed

Amount

Commitment fee .25%


5 years grace

period


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4. Leyte-Cebu Interconnection Uprating

Project

The project involves the installation of the additional three (3) submarine cables to sustain the reliability and stability of electricity in the Cebu, Negros and Panay Grids.



6-230 KV PCB

2-138 KV PCB

3-13.8 KV PCB



Forex Portion:

JBIC Buyer’s Credit

Local Portion:

Development Bank of the Phils. Sydicated Term Loan

JBIC Loan:

Loan Amount ¥ 6,768,408,335

Interest Rate (%) 2.1% plus risk premium of

1.59%

Guarantee Fee (%) 1% on the outstanding

loan

Commitment Fee 0.2% per annum on the

daily unutilized portion of

the loan

Upfront Fee .3%

Maturity/Terms 0 grace period, 10 years

DBP:

Loan Amount P 600,000

Interest Rate (%) 10.75%

Guarantee Fee (%) 1.000%

Arrangers Fee 0.75%

Gross Receipts Tax – GRT (%) 5.00%


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4. Leyte-Cebu Interconnection Uprating

Project

DBP:

Legal Fee 500,000

Taxes & Other Incidental

Expenses 303,901

Out-of-Pocket Expenses (OPE)

Loan 10,000

Maturity/Terms 7 years including 1 year

grace period

5. Cebu-Negros Interconnection Uprating

Project

The project involves the installation of the following to increase the power transfer capability generated from the Palinpinon Grothermal and for reliability and stability of the Cebu-Negros-Panay-Leyte-Samar Grid:

Submarine Cable : 17.8 kms.

Transmission Line : 143 kms. ( 138 KV and 69

KV)


Forex Portion:

Miyazawa Fund

Local Portion:


Interest Rate (%) Tranche A – Fixed Rate

of 1.60%

Tranche B – Floating

interest rate – LIBOR

Commitment Fee 0.40% per annum of the

unused Tranche B

Management Fee/ JP¥420,000,000

Upfront Fee

Agency Fee JP¥2,000,000

Maturity/Terms Bullet payment after 10

years


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5. Cebu-Negros Interconnection Uprating

Project


10-138 KV PCB

1-69 KV PCB

1-2 x 20 MVAR Shunt Reactor


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Financial Proposal for the ASEAN Interconnection Projects (as example) (cont.)

Financing Models/Options of the Interconnection Projects - Thailand



Description

THAILAND – PENINSULAR MALAYSIA

a) Sadao – Bukit Keteri

(Short term)

b) HVDC Links between

Khlong Ngae-Gurun

(Medium term)

EGAT

TNB

•The stage I interconnection is now used

as a backup interconnection.

•The stage II (HVDC) interconnection

project (transfer capability of 300 MW)

was completed in September 2001.

The HVDC system comprises a 110 km

DC transmission line capable of

transferring 300 MW between a 275 kV

DC converter substation in Gurun,

Kedah, Malaysia and a 230 kV DC

converter substation in Khlong Ngae,

Thailandใ

Bilateral G to G



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Financing Models/Options of the Interconnection Projects - Thailand (cont.)



Description

THAILAND – PENINSULAR MALAYSIA

a) Sadao – Bukit Keteri

(Short term)

b) HVDC Links between

Khlong Ngae-Gurun

(Medium term)

EGAT

TNB

•Joint-study to upgrade the

interconnection project from 300 MW to

600 MW has been initiated. Currently

members of the joint team are working

on the generation expansion plan.

•Meetings have been held to study the

upgrading of project from 300 MW to

600 MW. It was established that

600MW power transfer from TNB to

EGAT is only feasible post-2012 if there

is demand for power from EGAT in

southern Thailand and the southern

EGAT system is upgraded.

Feasible from 2024 onward

Bilateral G to G



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Description

THAILAND – LAO PDR

a) Nam Theun 2

(920 MW)

b) Udon Thani – Nabong

-Nam Ngum 2 (597 MW)

-Nam Ngum 3 (615 MW)

-Nam Theun 1 (523 MW)

-Nam Ngiep 1 (261 MW)

EGAT

EDL

•The Power Purchase Agreement

(PPA) between EGAT and the

developer of Nam Theun 2 Project

was signed on November 8, 2003.

The feasibility study of the

transmission project on Thai side

was submitted for approval from the

Thai Government in February 2004.

The interconnection project is

expected to be completed in April

2009.

•COD 2009

•COD 2011

•Under tariff negotiation



SPV + EGAT

ADB + EGAT

Lao PDR:

-Invested by SPV

(Nam Theun 2

Power Company

Limited: NTPC)

-Financed by WB,

ADB and multilateral

Commercial Banks

Thailand:

-EGAT Self-

Financing

Lao PDR:

-Invested by SPV

-Financed by ADB

Thailand:

-EGAT Self-

Financing


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Description

THAILAND – LAO PDR

c) Mae Moh 3 – Hong Sa

d) Roi Et – Savannakhet

(Medium term)

c) Ubol Ratchathani –

Ban Sok (Long term)

EGAT

EDL


•No Progress

•No Progress

SPV + EGAT

Bilateral G to G

/ ADB support

Lao PDR:

-Invested by SPV

-Financed by WB,

ADB and multilateral

Commercial Banks

Thailand:

-EGAT Self-

Financing

In case Bilateral G to G invested by government authorities/utilities of both countries while financing support from ADB of EGAT Self-Financing for T/L in Thailand.

In case SPV which specific project (s) to be developed and connected to grid SPV will invested in Lao PDR while EGAT Self-Financing for T/L in Thailand.


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Financing Models/Options of the Interconnection Projects – Thailand (cont.)



Description

THAILAND – MYANMAR

a) Hutgyi (7x185 MW)

b) Tasang

THAILAND – CAMBODIA

(Short term)

EGAT

EGAT

EDC

•Feasibility Study completed mid

2007.

•Under negotiation for connecting

lower dam (120 MW) to the northern

system of Thailand.

•Thailand and Cambodia have reached

a conclusion on the revision to tariff

structure.

•Transmission on both sides has been

completed and started energizing in 2007.

SPV + EGAT

Bilateral G to G

SPV which specific project (s) to be developed and connected to grid SPV will invested in Myanmar while EGAT Self-Financing for T/L in Thailand.


Cambodia financing supported by ADB, WB.


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Cambodia 3 power exchange connections with Lao PDR, Thailand and Vietnam

Indonesia-Malaysia 3 power exchange connections (in progress)

Malaysia 1 Internal power exchange connection (in progress)

Malaysia-Singapore 1 power exchange connection

Philippines 5 Internal power exchange connections

Thailand-Malaysia 2 power exchange connections

Thailand-Lao PDR 2 power exchange connections and 3 power purchase interconnections (in progress)

Thailand-Myanmar 2 power purchase interconnections (in progress)

Financing Options ADB, World Bank, EXIM Bank, JBIC

Joint Venture between interconnected utilities

Bilateral G to G, utility self-financing

SPV Investment as part of power purchase project

ConclusionsConclusions

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End of presentation

Thank you

Documents

ASEAN POWER GRID (APG) FINANCING OPTIONS