ADB allows sale of 600-MW Masinloc power plant

The Asian Development Bank (ADB) gave its consent to the sale of the 600-megawatt Masinloc coal-fired power plant in Zambales while another creditor, the Japan Bank for International Cooperation (JBIC) is expected to shortly follow suit.

The Power Sector Assets and Liabilities Management Corp. (PSALM), the government’s power privatization agency said that the creditor consent extended to Masinloc coincided with ADB’s approval of the transfer of liabilities and eligible generation assets of the National Power Corp. (Napocor).

"The board of directors of ADB approved the government’s request for the transfer of liabilities and generation assets of Napocor to PSALM and all of Napocor’s transmission and sub-transmission assets to the National Transmission Corp. (Transco), subject to execution and performance of the Omnibus Amendment Agreement," said Patrick Giraud, ADB director for infrastructure division in Southeast Asia.

Giraud noted that the Omnibus Amendment Agreement is being finalized for execution.

At the same time, PSALM is also firming up the terms of reference for the bidding of Transco which is government’s biggest privatization effort in the power sector.

"These welcome developments will boost government’s efforts to speed up the power industry’s restructuring and privatization program because the creditor consent from ADB sends a positive signal that will encourage the entry of more investors," said PSALM president Nieves Osorio.

A major condition for the completion of the sale and transfer of Napocor assets is the consent of Napocor’s creditors.

Since March last year, PSALM sold six plants, generating $566.9 million or about P31.75 billion.

Masinloc was the single biggest sale, fetching a bid price of $561.7 million from YNN Pacific Consortium in partnership with an Australian company.

Osorio said the ADB creditor consent will pave the way for the turnover of the Masinloc power plant to the YNN consortium.