DOF eyes P12B from sale of Masinloc

The Department of Finance (DOF) expects to realize an additional P12 billion in revenues this year from the sale of the 600-megawatt (MW) Masinloc coal-fired power plant, the first big ticket asset of the National Power Corp. (Napocor) placed on the auction block late last year.

"There would be a first installment payment of about $230 million or P12 billion to be remitted to the Power Sector Assets and Liabilities Management Corp. (PSALM) in the fourth quarter of this year," Finance Undersecretary Roberto Tan said yesterday.

Tan said the payment would be realized as multilateral creditors of the Napocor – World Bank, Asian Development Bank and Japan Bank for International Cooperation (JBIC) – are expected to give their consent on the transfer of the Masinloc power facility to its new owner YNN Pacific Consortium.

But Tan said PSALM is not likely to offer any more big ticket items this year. "It is not likely for PSALM to be able to sell within the remaining months of the year due to the level of confidence of investors which continues to be anchored on the sale of the transmission assets and the creation of the wholesale electricity spot market (WESM),"he said.

He said the WESM is very critical. "They are having a pilot operation of WESM. They (investors) are all waiting for that (WESM)," he added.

The government successfully sold Masinloc to the Australian group for $561.7 million. About 40 percent of the offer price will be the first installment to the government.

YNN Consortium is composed of YNN Holdings with Filipino investors and Great Pacific Financial Group of Australia. The Australian group will reportedly tie up with a big power firm in Australia to help in the running of the newly-acquired power facility.

Masinloc is the sixth power plant to be successfully privatized through bidding. In November last year, PSALM bid out the 1.2 Loboc hydroelectric plant (HEP) in Bohol to Sta. Clara International for $1.42 million. In September, PSALM bid out the 0.4 MW Cawayan HEP in Sorsogon to Sorsogon II Electric Cooperative, Inc. for $410,410.

During the first half of 2004, PSALM also bid out the Talomo HEP in Davao to Aboitiz-owned Hydro Electric Development Corp. for $1.37 million, while the Lopez energy firm First Generation Holdings gave the highest bid for the Agusan HEP with its offer of $1.5 million. Barit HEP in Camarines Sur was bid out for $480,000 to Ramon I. Constancio, a US-based Filipino lawyer.

The government has to sell 70 percent as required by Sec. 47 of EPIRA, in preparation for open access. The WESM, on the other hand, is to be established, as mandated in section 30 of the EPIRA, to create a competitive market that would help bring cost-effective electricity to consumers.

Finance Assistant Secretary Gil Beltran said some P24 billion has been committed by PSALM to remit from the privatization of Napocor assets this year.

PSALM is an entity created under the Electric Power Industry Reform Act (EPIRA) to manage the finances and privatization of Napocor.