26 Sep 2008
The Power Sector Assets and Liabilities Management Corporation (PSALM), unperturbed by adverse developments in the world financial markets, scheduled its fourth loan prepayment this year in its ongoing efforts to reduce the debts of the National Power Corporation.
Last 16 September 2008, PSALM prepaid two yen loans of National Power totaling Y19.76 billion, or USD184.14 million. The loans were extended by the Asian Development Bank (ADB) and the Japan Bank for International Cooperation (JBIC) to National Power for the 600-megawatt Masinloc coal-fired power plant in Zambales which was successfully privatized in 2007.
The ADB loan amounted to Y12.66 billion, or USD117.82 million, while the JBIC loan reached Y7.10 billion, or USD66.32 million.
PSALM's aggregate prepayment to date amounting to USD1.30 billion has substantially contributed to cutting National Power's total debts from USD7.01 billion as of end 2007 to USD5.8 billion as of September 2008. The successful prepayments were made possible through the support provided by the Bangko Sentral ng Pilipinas which ensured the smooth processing of the payments.
Aside from savings on interest payments and guarantee fees, the prepayments reduced National Power's foreign currency debt by 4%, and increased the peso component of the debt currency mix by 2% to 13%.
Strategic Communications and Partnership Division