05 Dec 2007
The Power Sector Assets and Liabilities Management Corporation (PSALM) has moved the public bidding for the 192.5-megawatt (MW) Palinpinon Geothermal Power Plant and 146.5-MW Panay Diesel Power Plant as it finalizes revisions in the transaction documents on the privatization of the facilities. The bidding was originally set for 05 December.
PSALM has taken the cue of the Joint Congressional Power Commission (JCPC) on the Geothermal Resources Supply Contract (GRSC), or the steam sale agreement, which will be attached to the facilities. The revised agreement will assure the winning bidder of steady fuel to run the Palinpinon power plant and is expected to enhance the transaction, translating into higher proceeds.
The modified timetable for the Palinpinon-Panay bidding was formalized through a Supplemental Bid Bulletin that PSALM issued to the qualified bidders.
With the sale of the Palinpinon-Panay facilities, PSALM will achieve its 50% privatization target for this year. PSALM will also be on track to meet its 2008 target of privatizing 70% of the National Power Corporation's generation assets in Luzon and the Visayas. The 70% level is a precondition for open access and retail competition in the power industry.
Considering the winning bids for the plants so far sold this year, PSALM expects another record-setting bid with the Palinpinon-Panay package. PSALM is mandated to use the privatization proceeds to settle National Power's debts.
PSALM is set to prepay a portion of National Power's debts after securing the necessary approvals. Targeted for prepayment are the National Power's yen denominated loans.
The Palinpinon and Panay power plants are located in the Visayas region, with the Palinpinon facility strategically situated between the islands of Panay and Cebu. Palinpinon supplies 60 MW to Panay to augment the power supply in the island.
Commissioned in 1983, the Palinpinon Geothermal Power Plant consists of two power stations: Palinpinon I and II. The plant uses geothermal steam supplied by the Philippine National Oil Company-Energy Development Corporation whose 60% government stake was recently turned over to First Gen Power Corp. The Palinpinon power plant supplies 18% to 20% of the electricity demand in the Cebu-Negros-Panay-Bohol-Leyte-Samar Grid.
The Panay Diesel Power Plant consists of the Panay 1 and 3 plants, which are the only land-based facilities of National Power in the island. They are peaking plants that provide ancillary services such as backup power, load following, system frequency, and voltage regulation.
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