"The partial guarantee to be provided by ADB should be tied to an existing program like PSRL," PSALM president Edgardo del Fonso said.
Among the conditions are: the submission of a privatization plan for the National Power Corp. (Napocor) and establishment of WESM system, he said.
Del Fonso said they have submitted a privatization blueprint for Napocor while they are still finalizing the establishment of a WESM system since it is awaiting a $40-million loan from ADB to finance the project.
Del Fonso said the yen bond float should be approved by ADB while the PSRL program still exists. "The bond float should be approved by ADB before the PSRL expires," Del Fonso said.
He said the PSRL program will expire once the $200 million last tranche is released. "We expect the release of the PSRL, the granting of a partial guarantee for the $750 million bond float and the $40 million loan for WESM to happen within this month," he said.
The ADB board, he said, is expected to approve in a meeting today all these three items.
PSALM changed recently the structure of its $750-million bond offering. Instead of offering $500 million US bonds, it will now offer $500 million worth of yen-dominated debt papers. At the same time, it lowered its dollar bond offering to $250 million from $500 million and deferred it to first quarter of 2003. Proceeds from the offering will be used by PSALM to finance the financing requirement of Napocor.
Under the Electric Power Industry Reform Act (EPIRA), PSALM will absorb all the assets and liabilities of Napocor. It will also be in-charge of the privatization of the state-owned power firm.
Napocor’s financing requirement for 2002 will reach $1.5 billion. Napocor was able to raise some $750 million in the first half of 2002 when it piggy-backed with the National Government through the Department of Finance (DOF). – Donnabelle Gatdula