Philippines: Napocor to be privatized by 50% in December

May. 22, 2007

MANILA — In line with President Gloria Macapagal-Arroyo’s thrust to ensure enough and cheap energy for communities and industries, the Power Sector Assets and Liabilities Management (PSALM) is set to privatize 50 percent of the National Power Corporation’s (NAPOCOR) assets within the year.

Cabinet Secretary Ricardo Saludo said the sale of NAPOCOR’s assets would “boost business confidence and generate needed investments for future electricity needs of the country.”

PSALM is the state agency tasked with selling NAPOCOR’s assets.

NAPOCOR operates 28 power plants in the country and with the sale of its assets, the government stands to save some P40 billion annually in financing costs.

The timeline for NAPOCOR’s privatization has been laid out as follows: after the winning bidder is identified in December, the board would approve in two to three weeks the winning bidder. The contract would be effective January 2008.

The Masinloc coal-fired power plant in Zambales would be bidded out in July, with the deal expected to be completed in two to three months.

On the other hand, the Calaca coal-fired power plant would be bidded out on the first half of October and closing early next year.

The Palimpinon geothermal plant would be bidded out on the second half of October, followed by the Ambuklao-Binga hydroelectric power plant in November.

“The sale of the Masinloc, Calaca, Palimpinon and Ambuklao-Binga power plants within the year will actually go beyond the 50 percent privatization target,” Secretary Saludo said.

He further said that PSALM would issue a Supplemental Bid Bulletin to announce the release of transaction documents for the sale of the Masinloc power plant.

The transaction documents would contain the Asset Purchase Agreement and the Land Lease Agreement for the Masinloc plant, Saludo added.

The President has noted that without competitive power prices, stable energy (supply) would not be competitive.

“Stable energy is an important indication of a Strong Philippine Republic,” the President has said.

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