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By Maricel E. Burgonio and Euan
Paulo C. Añonuevo, Reporters
The government expects to divest fully
from the country’s largest geothermal energy producer by November,
according to state-run Development Bank of the Philippines.
In a statement, the lender, which
serves as financial adviser for the deal, said the privatization of
Philippine National Oil Co.-Energy Development Corp. (PNOC-EDC) is
imminent as the government has received strong expressions of
interest from foreign and local investors in the asset.
However, only local nationals may
bid under the pre-qualification requirements, DBP said.
“A relevant feature of the
proposed sale is that, in compliance with statutory ownership
restrictions on land ownership and on the development and
utilization of natural resources, only Philippine nationals can
qualify to bid under law,” the bank said.
However, foreign and local
parties may initially prequalify. Foreign nationals are
required to form incorporated consortia with Philippine nationals in
order to submit a bid.
The submission of bids is
scheduled for November 21. The transaction is expected to be
completed by the end of that month. Under the proposed
transaction timetable, the deadline for submission of initial
prequalification requirements is October 5.
Announcement of pre-qualified
bidders is targeted for October 10, with
final qualification set for October 26. Besides
DBP, PNOC also contracted ING as financial adviser for the sale.
The decision to fully divest from
PNOC-EDC comes shortly after PNOC successfully raised P17.1 billion
from the sale of 3 billion shares in July.
Unlike the prior sale of PNOC EDC
shares, the upcoming sale of the government’s stake in the company
represents a controlling stake in a firm considered as one of the
crown jewels of the PNOC Group.
The government will sell its
remaining 20 percent share in PNOC-EDC to raise at least P30
billion. It has been pushing for the early sale of the asset, as it
is hard-pressed to keep its budget deficit below a P63-billion
ceiling by yearend in the face of poor tax collections in the first
half of the year.
As the country’s largest
producer of geothermal energy, PNOC-EDC is largely credited for the
Philippines being the second-largest producer of geothermal energy
in the world.
The winning bidder is expected to
control over 60 percent of the Philippines installed geothermal
capacity and have exclusive exploration and development rights over
key geothermal reserve areas in the Philippines
through long-term contracts with the government.
“Even prior to the formal
launch of our sale process, we had received multiple
indications of interest from top local and foreign groups,
especially after announcements were made by
the Philippine government of its intention to sell
its remaining interest in PNOC-EDC by the end of
the year,” Antonio M. Cailao, PNOC president said.
Recently, PNOC-EDC received
offers to develop three geothermal sites in Indonesia. Former energy
undersecretary Guillermo Balce, now PNOC-EDC consultant, said that
state-owned PT Perusahaan Listrik Negara of Indonesia has offered
three sites for geothermal consultancy and development to the
Philippine company.
The proposed areas for geothermal
energy production include Sumatra, Java, and Manado in Indonesia
which is planning to develop about 2,000 megawatts of geothermal
projects by 2009.
Balce said that PNOC-EDC was only
looking to secure one project “but they are offering us three.”
He disclosed that he will soon be leaving for Indonesia to follow up
on the geothermal energy projects.
Besides this, PNOC-EDC is also in
talks with groups in Bangladesh, Cambodia and Kazakhstan for
possible geothermal drilling or consultancy services.
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