16 Apr 2008
The Power Sector Assets and Liabilities Management Corporation (PSALM) formally turned over today (16 April) the 600-megawatt (MW) Masinloc Coal-Fired Thermal Power Plant to Masinloc Power Partners Co. Ltd. (MPPCL) in simple ceremonies.
MPPCL, a consortium led by Singapore-based AES Transpower Pte. Ltd., was declared the highest bidder for the Masinloc power plant in the bidding held last 26 July 2007 with an offer of USD930 million.
The turnover closes the sale of the Masinloc power plant. MPPCL opted to pay the full amount of its bid at closing. The amount will go to the liquidation of the National Power Corporation's debts, as specified in the Electric Power Industry Reform Act, to ease the government's debt burden.
The ceremonial key to the plant was turned over by Energy Secretary Angelo T. Reyes and Finance Secretary Margarito B. Teves to AES Executive Vice President Mark Woodruff and AES Philippines Chief Executive Officer Matthew Bartley.
Sec. Teves remarked that the turnover symbolized the government's "desire to have more power at affordable cost to support the country's development."
PSALM President Jose C. Ibazeta said the government "gained an ally for electricity reform" in AES. National Power Corporation President Cyril C. del Callar, meanwhile, welcomed "with open arms" its new partner in the electricity sector.
In a separate statement, Paul Hanrahan, AES president and chief executive officer, said, "This is a particularly attractive investment because the existing facility has the infrastructure in place to allow AES to add an additional 600 MW of generation capacity. As AES has done through similar acquisitions in other parts of the world, we expect to improve the overall efficiency and output of the existing plant, providing more reliable energy to the Philippine market."
The Asset Purchase Agreement (APA) for the Masinloc power plant provides that the transaction should close no later than 270 days after the APA's effectivity date of 28 August 2007, or until 24 May 2008. The parties exerted great efforts and worked closely together to close the transaction ahead of the deadline.
The Masinloc plant was bid out with a transition supply contract covering around 265 MW.
As early as 2006, PSALM had obtained the specific consents of the major creditors of National Power - the Asian Development Bank, the World Bank, and the Japan Bank for International Cooperation - to the transfer of the Masinloc plant.
Strategic Communications and Partnership Division