ADB, Philippines Sign Pact For Transfer Of Napocor Debts
Sunday, March 05, 2006
MANILA (Dow Jones)--The Asian Development Bank on Friday signed an agreement to allow the transfer of National Power Corp.'s (NAP.YY) assets and debts, a requirement to fasttrack the privatization of the Philippines' largest electricity producer.
The signing of the agreement "is a milestone because ADB is the first big creditor to give its consent to the transfer of all assets and liabilities of National Power," said Nieves Osorio, president of Power Sector Assets & Liabilities Management Corp., or Psalm.
"We now expect the other big creditors to follow suit within the year, which is our target," she said.
National Power, also known as Napocor, owes around $7 billion to the ADB, the World Bank, the Japan Bank for International Cooperation, and a host of commercial banks and bond holders.
The utility owes the ADB and the World Bank around $500 million each and more than $1 billion to JBIC. It owes bond holders around $2 billion.
Thomas Crouch, country director of the ADB in Philippines, said the privatization of Napocor is a necessary part of the government's fiscal consolidation program. He noted that Napocor is among the biggest strains on the government's coffers.
Napocor's privatization is expected to reduce electricity costs and improve investor confidence.
Psalm was created to oversee the privatization. It will take over Napocor's power-generating assets, which will allow it to run the power plants and to manage costs.
posted by philpower @ 9:31 PM,
