IPPs sale to make Napocor
debt-free
by Myla Iglesias
The Power Assets and Liabilities Management
Corp. will pay down National Power Corp.’s entire debt stock
with the $13 billion that is expected from the privatization of
independent power producers contracts which starts this August.
"Everything we get is for debt servicing of
Napocor," Jose Ibazeta, president of Psalm, said.
Napocor has total debts of $ 7.2 billion. Of
the total, Psalm is prepaying $2.4 billion ahead of their
maturities in 2009, 2010 and 2011.
Ibazeta said Psalm has already pre-terminated
$120 million last year, and $300 million more will be prepaid
this year.
Because of the expected proceeds from the
asset sales, Ibazeta said Psalm has no plans to borrow money for
Napocor this year.
At the end of 2007, the Psalm has raised a
total of $2.7 billion from the auctions of 12 power plants.
Ibazeta said Psalm expects to collect a total
of $1.9 billion this year. He said it has already raised $930
million from AES Corp.’s full payment for the Masinloc
coal-fired plant and $500 million will come from Suez-Tractebel,
the winning bidder of Calaca.
However, Ibazeta said Psalm, the government
agency tasked to manage the assets and liabilities of Napocor,
is yet to finalize how to bid out the IPP contracts to buyers.
He said the agency may come out with its
decision by the end of the month or in "two
week’s time."
Ibazeta said Psalm is studying two business
models, whether to transfer the fuel procurement functions of
Napocor to the winning bidder or the management of the energy
output of the IPPs then sell it to the spot market.
The Energy Power Industry Reform Act (Epira)
has mandated the privatization of the NPC-IPP contracts in Luzon
and Visayas. This will pave the way for the open access and
retail competition that is seen to reduce the prices of
electricity.
Napocor has 15 IPP power plants that include
the largest 1,200MW Ilijan natural gas-fired power plant; 700 MW
Pagbilao coal-fired power plant; 1,000-MW Sual coal-fired power
plant; and 345MW San Roque hydroelectric power plant.
The others are the 70MW Bakun hydroelectric
power plant, 18MW Hedcor hydroelectric power plant, 754MW CBK
power plant, PNOC-EDC geothermal power plant (Leyte A & B),
630MW Malaya thermal power plant, Casecnan, Subic DPP, Baung
diesel power plant, Limay and Salcon.
The power plants will be sold to IPP
administrators or qualified independent entities appointed by
Psalm to take over the assets through public bidding.
The IPPAs will manage the contracted energy
output of Napocor’s IPP contracts, will be responsible in
bidding the IPP energy output to the wholesale electricity spot
market (Wesm) and negotiate bilateral contracts with consumers.