PSALM to float P600M in bonds for Cebu-Leyte proj

The National Power Corp. (Napocor), through the Power Sector Assets and Liabilities Management Corp. (PSALM), plans to float P600-million worth of bonds for financing a portion of the $68.5-million Leyte-Cebu transmission uprating project of the National Transmission Corp. (Transco).

Under the Electric Power Industry Reform Act (EPIRA), PSALM and Transco will handle the generation and transmission assets of Napocor, respectively.

A Transco official said Transco, however, still has no authority to borrow funds since Napocor’s assets have yet to be officially transferred to the two spin-off entities.

Proceeds from the bond flotation will finance the remaining 15-percent funding requirement of the Leyte-Cebu project, a major transmission backbone in the Visayas.

Napocor is set to sign a $56.4-million loan agreement with the Japan Bank for International Cooperation (JBIC) to finance about 85 percent of the Leyte-Cebu project, one of Transco’s major endeavors under Project VISTA (Visayas Transmission Augmentation Program).

As the implementor of the project, Transco signed the contract with the winning turnkey contractor – the Japanese consortium of J Power Systems and Kanematsu – last November.

Since the asset transfer among the three entities – PSALM, Napocor and Transco – have yet to be completed, Napocor will still act as the signatory to the loan agreement.

The Leyte-Cebu uprating project is one of the first projects Transco has committed to plug the impending power supply deficit in the Visayas.

The 15-month project entails the installation of a second circuit submarine cable from Leyte to Cebu, spanning 32.5 kilometers. Once completed, the islands of Cebu, Negros and Panay, as well as Mactan, will be able to utilize an additional 200 megawatts (MW) of power from the geothermal resource of Tongonan in Leyte to help reduce the supply shortfall.