08 Oct 2015
On 30 September 2015, the Power Sector Assets and Liabilities Management (PSALM) Corporation received in full the balance of the restructured obligation of the Pampanga II Electric Cooperative, Inc. (PELCO II) amounting to almost PhP1.1 billion (PhP1,095,346,131.73).
"The amount of prepayment sets the record as the biggest ever received by the government power firm from any electric cooperative (EC) for its outstanding obligation. This will redound to the reduction of stranded debts of National Power Corporation (NPC)," said PSALM President and CEO Lourdes S. Alzona.
PELCO II is the first EC to succeed under an Investment and Management Contract (IMC), a program of the National Electrification Administration (NEA). Backed by IMC and a loan from the Philippine National Bank, PELCO II was able to prepay its restructured account with PSALM, which originally amounted to PhP1.43 billion (PhP1,431,946,972.37) to be amortized within a period of 10 years beginning October 2010.
"This is a historical event for PSALM because PELCO II's prepayment is the first full prepayment to us," said PSALM Treasury Department Manager Manuel Marcos M. Villalon II, who attended the ceremonial signing and check turnover. "It encourages ailing electric cooperatives to consider IMC as an option to address financial concerns. Hopefully, this can be a project that the other electric cooperatives will also engage in," he added.
In October 2010, pursuant to the Department of Energy Circular No. 2010-05-0006, the PSALM Board of Directors approved the restructuring of PELCO II's unpaid power obligations.
PELCO II is currently under a 20-year IMC with the Comstech Integration Alliance, Inc. (Comstech) and the Manila Electric Co. (Meralco), the latter acting as Technical Advisor to Comstech. Based on the IMC, the Investor-Manager will settle PELCO II's debts with the NEA and its power supplier.
Corporate Communications Division