Steag State Power Inc.

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Steag State Power Inc. was a joint venture of German firm STEAG AG and State Investment Trust Inc to build and operate a 210 MW coal power plant at Cagayan de Oro, Mindanao. The power purchase agreement (PPA) was signed with National Power Corporation and Power Sector Assets and Liabilities Management Corporation. The PPA was for 25 years starting when the power plant entered operation, which was expected in 2006. The fuel supply was to be provided by PT Jerong Barutama Greston in Indonesia. The total project cost was US$305 million of which equity stake was US$89 million and VAT facility was US$15 million. The debt was US$201 million which comprised a US$60.6 million JBIC direct loan facility, US$40.4 million NEXI facility and a US$200 million GKA facility. In January 2007, the plant went on operational. In November 2007, Aboitiz Power Corporation acquired a 34% stake in the Steag State Power Company’s independent power producer project for almost US$92 million. Upon the transaction, Germany’s Evonik Industries, formerly known as Steag, owned a 55% controlling stake in the project while the remaining 11% was owned by the local State Investment Trust. http://www.steag.com/steagde/emindanao.aspx No clarity on total investment, or total project size. Different numbers reported. In November 2007, Aboitiz Power Corporation reported that the firm will confer with its partners about expanding its 232MW Mindanao coal-fired power plant by at least 100MW. In January 2009, it was reported that Aboitiz had postponed the expansion of the STEAG power plant, claiming that it was difficult for a private generator to compete with National Power Company's very low rates, which were not reflective of true costs.