07 Apr 2015
The success of the Power Sector Assets and Liabilities Management (PSALM) Corporation's privatization program has helped trim down the financial obligations it assumed from the National Power Corporation (NPC) under the Electric Power Industry Reform Act (EPIRA) by 42%, or from PhP1.2 trillion as of end-December 2000 - inclusive of interest - to PhP698.9 billion as of end-2014.
"Broken down, the figure consists of principal amount of PhP830.7 billion as of 2000, and interest amounting to PhP373.0 billion. PSALM has reduced the principal by 30% (PhP248.5 billion) to PhP582.2 billion and likewise decreased the interest payable by 69% (PhP256.3 billion). The remaining interest until the debt maturity still amounts to about PhP116.7 billion," PSALM President and Chief Executive Officer Emmanuel R. Ledesma, Jr. said.
PSALM's privatization program has generated a total PhP916.2 billion as of end-2014. Of the total privatization proceeds, PhP420.1 billion has been paid to PSALM while PhP471.5 billion remains to be collected. The balance of PhP24.6 billion accounts for the reduction due to foreign exchange fluctuations and contractual adjustments.
The recent addition to the privatization proceeds, Mr. Ledesma noted, came from the payment for the 218-MW Angat Hydroelectric Power Plant, which PSALM turned over to Korea Water Resources Corporation (K-Water) on 31 October 2014; and the 153.1-MW Naga Power Plant, which was turned over to SPC Power Corporation on 25 September 2014.
"The completion of these privatization activities generated PhP21 billion for the government. PSALM received PhP20 billion from K-Water and PhP1.1 billion from SPC," Mr. Ledesma specified.
"Given the PhP698.9-billion outstanding financial obligations and the PhP471.5-billion privatization receivables, PSALM estimates a funding shortfall of PhP227.4 billion for its remaining obligations," he explained.
There are other power assets in PSALM's current portfolio that can likewise help in the liquidation of its financial obligations. Among them are PSALM's power plants consisting of the Agus-Pulangui hydropower complex, Power Barges 101-104, and the Malaya thermal power plant; and the decommissioned Sucat thermal power plant. PSALM is also scheduled to privatize the energy outputs of its independent power producer (IPP) plants, namely, the Unified Leyte geothermal plant (for the plant's bulk energy); the Mindanao coal-fired thermal power plant; and the Caliraya-Botocan-Kalayaan hydropower plants.
On 26 December 2014, PSALM also turned over the management of energy outputs of the Unified Leyte (Strips of Energy) and Mindanao I and II (Mt. Apo 1 and 2) geothermal plants to their winning IPP Administrators (IPPAs). FDC Misamis Power Corporation is the winning IPPA for Mt. Apo 1 and 2. On the other hand, the winning bidders for ULGPP's Strips of Energy are Aboitiz Energy Solutions, Inc., 40 MW; FDC Utilities, Inc., 40 MW; Trans-Asia Oil and Energy Development Corporation, 40 MW; Unified Leyte Geothermal Energy Inc., 40 MW; Good Friends Hydro Resources Corporation, 20 MW; Vivant Energy Corporation, with 17 MW; and Waterfront Mactan Casino Hotel Inc., three (3) MW.
As provided under Section 34 of the EPIRA, any remaining deficit of PSALM would be recovered through a universal charge that will be collected from all end-users.
Corporate Communications Division