04 Jun 2007
As part of its commitment to fast-track the power privatization efforts of the government, the Power Sector Assets and Liabilities Management Corporation (PSALM) continues to work hand in hand with the private sector in establishing a more favorable investment climate that will attract more investors in the electricity industry.
Speaking before members of the Energy Committee of the American Chamber of Commerce in the Philippines, PSALM President Jose C. Ibazeta stressed the need to regularly sit down with investors to address issues and concerns pertinent to the government's privatization targets.
"It is not enough that government create opportunities for investment, it must also be reasonably open to investor needs," Mr. Ibazeta said. "Clearly, collaboration between government and industry is needed to ensure success. To be sustainable, it should be founded on good governance and mutual appreciation of each other's goals and needs."
Mr. Ibazeta disclosed that PSALM is reviewing its privatization structures to ensure that they remain responsive to market requirements. To broaden its investment base and generate investor feedback, PSALM also plans to launch more active marketing efforts, he said.
Mr. Ibazeta called on local and foreign investors to participate in the Corporation's privatization and liability management activities and support enabling power sector reform policies. "Be our bridge to global investor networks by promoting other forms of investments in the Philippines," he said.
PSALM is bent on raising the privatization level from 11% in 2006 to 50% by end of the year and 70% by 2008. Open access and retail competition in the power sector requires that 70% of the total operating capacity in Luzon and Visayas be privatized.
Among the power assets that PSALM has scheduled for privatization are the 600-megawatt (MW) Masinloc and the 600-MW Calaca coal-fired plants. PSALM is also keen on bidding out some of its hydropower facilities, particularly the Ambuklao and Binga hydro plants if feasible within the year. Mr. Ibazeta said PSALM would also take advantage of the "very positive investor feedback" that it has received for its geothermal plants.
PSALM is also "studying a proposal to privatize the plants by portfolio instead of individually, depending on investor feedback," he said.
After successfully bidding out eight of the 31 power facilities of National Power, PSALM has raised a total of USD436 million in cash representing partial payments for the plants sold for a total of USD664 million. Mr. Ibazeta disclosed that these proceeds would be used to pay off the maturing loans of National Power.
"PSALM must optimize proceeds and design structures to effectively manage liabilities and help bring down the cost of debt," he said. "We will also build on present support from the Department of Finance and the Bangko Sentral (ng Pilipinas) to develop policies that will direct liability management activities."
Mr. Ibazeta also noted PSALM's preparations for the next round of bidding for the 25-year concession of the National Transmission Corp. (TransCo), which is scheduled for December. "As the sole national electricity transmission company for the Philippines, TransCo should be one of the best deals among the assets on the selling block," he said.
Strategic Communications and Partnership Division |