27 May 2024
The Power Sector Assets and Liabilities Management (PSALM) Corporation achieved a major success in its ongoing efforts to manage and reduce its financial obligations (FO). The reduction in FO balance was due to a plethora of factors, notable of which are the following: (1) Therma Luzon, Inc.’s (TLI) prepayment of its monthly payments relative to the Pagbilao Coal-Fired Power Plant IPPA in November 2023, (2) the sale and turnover of the Casecnan Hydroelectric Power Plant (HEPP) to Fresh River Lakes Corporation in February 2024, and (3) successful privatization of selected real estate assets within the allotted timeline. PSALM has reduced its liabilities to PHP283.65 billion as of 31 March 2024. A remarkable decrease of PHP956.35 billion from the 2003 peak level of PHP1.24 trillion.
This achievement marks a significant step towards PSALM’s goal of fully privatizing and disposing of its remaining assets at reasonable returns using streamlined procedures.
“We are extremely pleased with the progress made in reducing our financial obligations,” said PSALM President and CEO, Mr. Dennis Edward A. Dela Serna. “The reduction in our financial obligations bring us closer to fulfilling PSALM’s mandates and ensuring a sustainable power sector in the Philippines.”
As of 30 March 2024, the privatization proceeds generated from the sale of generation assets, appointment of IPP Administrators, privatization by way of concession of the government transmission business amount to PHP903.412 billion, with an actual collection of PHP769.602 billion.
PSALM implemented multi-pronged strategies for lowering its obligations. It optimized the operations of remaining power assets and maximized revenue streams.
Aside from the Pagbilao IPPA prepayment amounting to PHP13.72 billion and upfront payment of the winning bidder for the Casecnan HEPP amounting to PHP17.64 billion, PSALM disposed of a total of four (4) real estate assets (REAs) raising PHP40.66 million in revenues. Proven approaches such as direct sale, land lease agreements, and exercise of previously issued option existence notice contributed to this success.
PSALM likewise entered into short-term lease agreements over certain assets that are not yet scheduled for privatization, raising additional revenues of PHP12.06 million.
In terms of power sales, PSALM achieved a collection efficiency rate of 93.35% which is equivalent to PHP14.91 billion collection from current power sales of its remaining power plants.
PSALM remains committed to further reducing its financial obligations and achieving a sustainable financial position. The corporation aims to continue its privatization initiatives, along with pursuing innovative solutions to manage its residual assets and liabilities.
Strategic Communications and Partnership Division |