Finance officials said the power company has complied mostly with the conditions set by its creditor, Asian Development Bank (ADB), which is co-financing the loan with Japan Bank for International Cooperation (JBIC).
Debt-saddled Napocor badly needs new loans to finance its capital expenditures as well as pay off several maturing debts this year.
Previously, Napocor was said to be negotiating for an extension of the deadline before ADB could release the second tranche or $200 million out of the $600-million loan approved by the ADB after the Power Sector Restructuring Law was enacted earlier this year. The first tranche of $200 million was already released to Napocor.
Napocor already conceded it could not beat the deadline of September 2002 and will need at least up to December of the same year to comply with the conditions of ADB.
These conditions include fastracking the Energy Regulatory Commission’s ruling on Napocor’s proposed unbundling of tariffs.
The unbundling of Napocor’s tariffs involves itemizing and segregating the components that go into power generation or production. Currently, not all components of power generation that go into the direct costs of producing electricity are itemized. The proposed structure will make it more transparent for consumers to identify what comprises their electricity bills.
Another condition set by ADB is for the lowering of capital gearing ratios for Napocor and its proposed subsidiaries and the completion of the installation of metering infrastructure.
Following the enactment of the Power Sector Restructuring Law, Napocor, already gearing up for privatization, could not borrow on its own.