19 Jul 2005
There remains a strong and consistent investor interest in the country’s power generating assets that is expected to further push privatization in the energy sector, the Department of Energy said.
“We have reason to be confident that despite the perceived political tension in the country, local and foreign investors have long-term prospects for investment in mind, specifically in the power sector,” said Energy Secretary Raphael M. Lotilla.
He cited the recent move of Aboitiz Equity Ventures Inc., (AEV) to team up with Norwegian company SN Power Invest AS, saying it shows a general, continuing interest in the country’s power assets.
AEV and SN plan to jointly bid for and develop hydroelectric power projects in the Philippines. AEV’s subsidiary, HEDCOR, now owns the 3.5-megawatt (MW) Talomo plant in Davao, the first power plant to be privatized by the government. The partnership will also allow the companies to share resources and bid for more than one of the assets being privatized by the Power Sector Assets and Liabilities Management Corp. (PSALM).
In July, PSALM, the government agency tasked to undertake the privatization of the country’s electricity industry, bid out the 600-MW Calaca coal-fired plant. But without a transition supply contract (TSC) that ensures a ready market for its electricity, the prospective bidders pulled out, forcing PSALM to cancel the bidding.
But PSALM officials reported that after the cancelled bid, investors, including foreign companies, expressed interest in bidding for Calaca even if it does not have a supply contract as originally envisioned.
Secretary Lotilla said these developments, coming in the wake of recent political turbulence, only show that investors can see beyond what is temporary, and are taking a long-term view of the country’s economic prospects.
The government began privatizing state-owned power plants in March 2004 as part of the restructuring of the power sector. PSALM has since successfully bid out six power plants, five of which are hydropower. These are Talomo in Davao, the 1.6-MW Agusan plant in Bukidnon, the 1.8-MW Barit plant in Camarines Sur, the 0.4-MW Cawayan plant in Sorsogon, and the 1.2-MW Loboc plant in Bohol. Proceeds from the sale of these hydropower plants amount to $5.2 million.
PSALM also bid out the 600-MW coal-fired Masinloc plant in Zambales with the winning bid amounting to $561.7 million. Total proceeds from the successful sale of the six plants amount to $566.9 million, or about P31.75 billion, which will be used to settle a portion of the debts of the National Power Corporation.
PSALM is set to privatize seven more hydropower plants. These are the 12-MW Masiway plant, the 100-MW Pantabangan plant, the 360-MW Magat plant, the 75-MW Ambuklao plant, the 100-MW Binga plant, the 246-MW Angat plant, and the 0.8-MW Amlan plant.
Strategic Communications and Partnership Division |