Manila, November 23, 2006
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The International Finance Corporation, the private sector arm of the World Bank Group, will provide $50 million to South Luzon Tollway Corporation to rehabilitate, expand, operate, and maintain the South Luzon Expressway, a key link between the capital and two heavily populated southern provinces. SLTC is owned by MTD Manila Expressways and the Philippine National Construction Corporation.
The rehabilitation and expansion of the expressway is expected to stimulate economic activity by enabling more exports to reach the port of Manila from Batangas and Laguna. About 60 percent of the country’s total merchandise exports are expected to pass through the expressway to the port of Manila upon project completion. This will reduce congestion, improve road safety, save travel time and fuel, and reduce maintenance costs for vehicles.
IFC’s investment consists of a 10-year loan facility totaling 2.5 billion Philippine pesos (about $50 million equivalent) for IFC’s own account. A consortium of banks led by Banco de Oro is expected to lend an additional 5.55 billion pesos ($111 million equivalent).
“This financing is part of IFC’s strategy in the infrastructure sector, which includes supporting public-private partnerships that promote projects with strong development impact. IFC expects this project to encourage further private sector participation in the country’s transport sector,” Richard Ranken, IFC’s Director for East Asia and the Pacific, said during the signing of the loan agreement.
The project has three components: rehabilitation and widening of the 1.2 kilometer Alabang viaduct, rehabilitation and widening of the 27.3 kilometer expressway linking the Alabang suburb to Calamba in Laguna province, and the construction of a 7.6 kilometer extension from Calamba to Santo Tomas in Batangas province. The 36.1 kilometer expressway is expected to be completed by November 2008.
“IFC is pleased to work with SLTC on this major toll road project, which will have a significant impact in spurring economic activity in the southern region of Manila. We believe that the successful development of projects like this will play an important role in helping attract more private investment in infrastructure, in the Philippines and across the region,” said Francisco Tourreilles, Director of IFC’s Infrastructure Department.
“We want the South Luzon Expressway to be a showcase for both our company and the Philippine government,” said Dato Azmil Khalid, Group Managing Director of MTD Capital Berhad, which owns MTD Manila Expressways. He added, “We are honored by IFC’s support and partnership in pushing through this much needed, yet long-delayed, project.” MTD Capital is a leading construction group and the second largest toll road operator in Malaysia.
In 2001, IFC provided a loan of $46 million to the Manila North Tollway Corp. for the expansion and operation of the North Luzon Expressway, an 82 kilometer toll road that links Metro Manila with provinces in the northern part of Luzon.
Financing key road projects is part of IFC’s commitment to supporting investments in the infrastructure sector. The project is also in line with the Philippine government’s Medium-Term Development Plan, which calls for increased private sector participation in infrastructure projects.
About IFC
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit
www.ifc.org
.
About SLTC
The South Luzon Tollway Corporation is a joint venture of the Philippine National Construction Corporation and MTD Manila Expressway. The Philippine National Construction Corporation has been granted the concession for the design, construction, and financing of the expressway’s rehabilitation and upgrading project by the Philippine government, as represented by the Toll Regulatory Board through an agreement entered into by the parties on February 1, 2006.
MTD Manila Expressway is a unit of MTD Capital Berhad, Malaysia’s the second-largest tollway operator and its only such company to operate internationally. MTD is a conglomerate consisting of four publicly listed companies with a market capitalization of $700 million. Its core business is in civil engineering, construction, infrastructure, and property development. It is a major proponent of property and infrastructure projects both in Malaysia and overseas. For inquiries, visit
www.mtdsltc.com
.
