PSALM seeks JBIC’s consent on transfer of Napocor debt
Sunday, February 26, 2006
By MYRNA M. VELASCO
The Power Sector Assets and Liabilities Management Corporation (PSALM) has raised anew with the Japan Bank on International Cooperation (JBIC) its long-standing bid for the completion of the transfer of the National Power Corporation’s outstanding debts under its charge.
"I raised that concern again with them," declared PSALM president Nieves L. Osorio, who recently travelled in Japan to join an investment promotion roadshow of the Arroyo administration’s economic team.
Energy Secretary Raphael P.M. Lotilla further noted that the prospect of JBIC giving consent to the debt transfer remains positive, especially so, since they are actively engaged in sorting out issues relating to the matter.
The Japanese lending firm has always been one of the most active players, in the area of extending funding, for the Philippine power industry; and this it wants to continue even after the deregulation of the sector.
Its exposure to the power sector are either through extending official development assistance (ODA) or in the form of international finance (more aptly treated as commercial loans) to various power projects.
Among the key NPC power ventures it funded were the Calaca coal-fired plant; Palinpinon geothermal facility; Ilijan natural gas-fired power project; San Roque hydropower and the Tiwi-Makiling-Banahaw projects.
JBIC noted that it is closely watching developments in the NPC privatization front; not only because of its existing stake in the industry; but for it to scour for new opportunities of participation.
The transfer of NPC debts to PSALM is mandated under the Electric Power Industry Reform Act, but before this mandate can be carried out, the lenders would have to give a categorical consent to it.
It is in this view that its consent for the transfer of the NPC outstanding loan obligations to PSALM is one of the most imperative matters that the Philippine government has to hurdle.
Among the three major creditors of NPC, it was the Asian Development Bank (ADB) that first gave concurrence to the debt transfer; while the World Bank indicated of giving its consent soon.
As tied to the policy reforms being introduced to the Philippine power industry, the NPC lenders are also closely watching how the privatization of the state-owned power firm’s transmission and generation assets would finally take shape.
Years of delay have been bugging this particular part of the reform process set for the industry because of various factors, including uncertainties in the power sector’s regulatory environment and some degree of instability in the political scene.
Those implementing the NPC privatization have opined that securing the consent of the creditors would provide for a smoother pace in the divestment of the assets; because this would unlock some of the uncertainties being raised by prospective investors.
But lenders have set forth some preconditions relating to the NPC’s debt transfer. ADB, for its part, has recommended a review or performance audit on NPC and PSALM by 2006, or at least a year after the operation of the Wholesale Electricity Spot Market.
With the debt assumption negotiations still ongoing, JBIC has sounded off to PSALM that it is still inclined to earmark a credit window that can be accessed by the buyers of the generation and transmission assets of NPC. (MMV)
posted by philpower @ 8:32 PM,
