No borrowings for Napocor this year if asset sales are successful
Business World, Friday, January 14, 2005
Debt-saddled National Power Corp. (Napocor) will not have to borrow this year should the sale of its generation and transmission assets push through, a Power Sector Assets and Liabilities Management Corp. (PSALM) official yesterday said.
"If we realize the proceeds from the privatization of the generation companies and National Transmission Corp. (Transco), we can have cash surplus. There would be no need to borrow for this year. It depends on the cash flow," the PSALM official, who refused to be named, said.
Transco, a spin-off firm tasked to operate the country's high-voltage transmission network, is valued around $2 billion. The government also hopes to generate some $2 billion from the power plant sales.
"If we are able to privatize both, we won't need to borrow. We can actually base it from the 2005 asset sales. The question now is when can we actually seal these transactions," the official said.
PSALM is the government firm mandated by Republic Act 9136 or the Electric Power Industry Reform Act of 2001 to dispose of all of Napocor's generation, transmission and other related assets.
The PSALM official also said that if the Energy Regulatory Commission (ERC) grants Napocor a full P1.87 per kilowatt-hour generation charge increase, Napocor can expect an improvement of at least P68 billion in cash flow for 2005.
"Since we're getting half, the expected improvement is P34 billion. That's how much we will reduce [our] deficit," the official said.
PSALM earlier said it is optimistic it can auction off 70% of the ailing firm's power plants by end-2005.
The government recently sold the 600-MW Masinloc coal-red power plant to YNN Pacific Consortium, Inc. for $561.7 million. It has also successfully privatized five small power plants since March: the 1.2-MW Loboc hydroelectric plant in Bohol which was sold to Santa Clara International Corp. for $1.42 million; 0.4-MW Cawayan hydroelectric plant in Sorsogon to Sorsogon II Electric Cooperative, Inc. for $410,410; 3.5-MW Talomo hydroelectric plant in Davao to Aboitiz-owned Hydro Electric Development Corp. for $1.37 million; 1.6-MW Agusan River mini-hydroelectric plant which was bought by First Generation Holdings Corp. for $1.5 million; and the 1.8-MW Barit hydroelectric plant in Camarines Sur which was sold to lawyer Ramon I. Constancio for $480,000. -- Bernardette S. Sto. Domingo
Debt-saddled National Power Corp. (Napocor) will not have to borrow this year should the sale of its generation and transmission assets push through, a Power Sector Assets and Liabilities Management Corp. (PSALM) official yesterday said.
"If we realize the proceeds from the privatization of the generation companies and National Transmission Corp. (Transco), we can have cash surplus. There would be no need to borrow for this year. It depends on the cash flow," the PSALM official, who refused to be named, said.
Transco, a spin-off firm tasked to operate the country's high-voltage transmission network, is valued around $2 billion. The government also hopes to generate some $2 billion from the power plant sales.
"If we are able to privatize both, we won't need to borrow. We can actually base it from the 2005 asset sales. The question now is when can we actually seal these transactions," the official said.
PSALM is the government firm mandated by Republic Act 9136 or the Electric Power Industry Reform Act of 2001 to dispose of all of Napocor's generation, transmission and other related assets.
The PSALM official also said that if the Energy Regulatory Commission (ERC) grants Napocor a full P1.87 per kilowatt-hour generation charge increase, Napocor can expect an improvement of at least P68 billion in cash flow for 2005.
"Since we're getting half, the expected improvement is P34 billion. That's how much we will reduce [our] deficit," the official said.
PSALM earlier said it is optimistic it can auction off 70% of the ailing firm's power plants by end-2005.
The government recently sold the 600-MW Masinloc coal-red power plant to YNN Pacific Consortium, Inc. for $561.7 million. It has also successfully privatized five small power plants since March: the 1.2-MW Loboc hydroelectric plant in Bohol which was sold to Santa Clara International Corp. for $1.42 million; 0.4-MW Cawayan hydroelectric plant in Sorsogon to Sorsogon II Electric Cooperative, Inc. for $410,410; 3.5-MW Talomo hydroelectric plant in Davao to Aboitiz-owned Hydro Electric Development Corp. for $1.37 million; 1.6-MW Agusan River mini-hydroelectric plant which was bought by First Generation Holdings Corp. for $1.5 million; and the 1.8-MW Barit hydroelectric plant in Camarines Sur which was sold to lawyer Ramon I. Constancio for $480,000. -- Bernardette S. Sto. Domingo
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