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By Euan Paulo C. Añonuevo, Reporter
The Power Sector Assets and
Liabilities Management Corp. (PSALM) has prepaid another tranche of
state-owned National Power Corp.’s yen-denominated loans.
PSALM, which is tasked to
privatize Napocor’s power plants to pay off its more than
$7-billion debt, monday prepaid $263 million of the latter’s yen
loans.
The amount represents Tranche B
of the Miyazawa yen-denominated loans extended in 1999 by the
Japanese government to Napocor to finance a number of transmission
projects.
Ferdinand A. Florendo, manager of
PSALM’s Capital Markets and Risk Management Department, said that
aside from savings on interest payments and guarantee fees, the
Miyazawa prepayment reduces Napocor’s foreign exchange debt by 4
percent and increases the peso component of the debt currency mix to
13 percent from 11 percent.
“This improves Napocor’s
liability profile by reducing the exposure of the company to foreign
currency fluctuations,” he added.
On March 20, PSALM prepaid $174
million of Napocor’s loans with the Japan Bank of International
Cooperation-Overseas Economic Cooperation Fund.
Added to the prepayment of the
Miyazawa loans, Napocor’s total debt has now been reduced by 5.6
percent. PSALM targets to reduce the company’s debt by at least 28
percent in the next two years.
The prepayment of the
yen-denominated loans was made possible by the sale of Napocor’s
generation plants.
The proceeds from the
privatization of Napocor’s assets have reached an estimated $500
million as of December 2007. This is expected to jack up
significantly this year with the scheduled sale of a number of the
company’s geothermal, diesel and hydro plants.
However, the bidding of two of
its geothermal plants-the 747-megawatt Tiwi-MakBan geothermal power
complex and the 192.5-megawatt Palinpinon—have been delayed
because of the tight schedule for the latter’s auction and fuel
supply issues for the former.
So far, PSALM has only managed to
sell the decommissioned Manila Thermal Power Plant (MTPP) for the
year to its new owner Malaysian firm Gagasan Steel for $2.5 million.
Pursuant to the Electric Power
Industry Reform Act of 2001 (EPIRA), proceeds from the privatization
of the government’s electricity assets are used by PSALM to
liquidate the financial obligations of the state-owned power
company.
Any residual Napocor debt after
the prepayment through the privatization of the company’s assets
will be considered “stranded” and will be paid by consumers
through the Universal Charge component in electricity bills.
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