Project Finance: Practical Case Studies

InterGen was formed in 1995 by subsidiaries of Bechtel Enterprises and Pacific Gas &
Electric (PG&E) to develop, own and operate power projects outside the United States. In
1996, because of a change in business strategy, PG&E sold its interest to Bechtel. Bechtel
later sold an interest in InterGen to Shell Generating Company.
At the time of the financing Ogden Energy designed, built, owned, acquired, operated,
maintained and managed independent power and cogeneration projects throughout the world.
It was a subsidiary of Ogden Corporation, a New York-based global services company with
revenues of US$2 billion. Ogden changed its name to Covanta in 2000, when it decided to sell
units in the entertainment and aviation business, and become a pure-play energy company.
PMRL is a Philippine limited partnership formed by PMR Holdings. Both PMRL and PMR
Power were formed when, in response to severe power shortages in 1992 and 1993, the
Philippine government began to encourage third-party participation in power plant development.

How the financing was arranged

Union Bank of Switzerland (UBS) was mandated to underwrite the entire US$662.5 million
bank debt portion of the financing in September 1996, thereby assuming Philippine country
risk for that entire amount during the presyndication period, and reached financial closing in
February 1997.
US Eximbank insured the US$405 million, 60-month construction loans against political
risks and agreed to take out that loan with a direct loan when construction was completed.
Nations Bank (now Bank of America) underwrote 50.1 per cent of the US$100 million
trustee loan facility, thereby satisfying the requirement for OPIC coverage that the majority of

POWER PLANT

Exhibit 11.3

Project ownership structure

InterGen

Quezon Generating

Company, Ltd

71.875% Voting interest

21% General partnership interest

27% Limited partnership interest

28.125% Voting interest

2% Voting

interest

2% Limited

partnership

interest

(non-voting)

Ogden Energy PMR Limited Co.

Ogden Power

Development -

Cayman, Inc.

Overseas

Bechtel, Inc

Quezon Power

(Philippines), Limited Co.