Napocor president Cyril del Callar said they intend to transfer these debts to the Power Sector Assets and Liabilities Management Corp. (PSALM) in the first quarter of 2006.
"We hope we could transfer all of Napocor’s maturing debts to PSALM as early as first quarter of next year so that we could keep our break-even position in 2006," he said.
For debt service alone, Del Callar said Napocor will spend about P18 billion to P20 billion in 2006, about the same level in 2005. Since 2001, Napocor has spent about P50 billion for debt servicing.
In 2004, Napocor’s long-term liabilities went down to P348.6 billion from P461.1 billion in 2003.
The bulk of the debts consists of foreign loans or P211.5 billion while P145.13 billion are bonds payable.
The multilateral creditors of Napocor, mainly Asian Development Bank, World Bank, and Japan Bank for International Cooperation (JBIC) have consented the transfer of the assets and liabilities of the power firm to PSALM.
PSALM, an entity created under Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA), is tasked to handle the finances and the privatization of Napocor assets.
The transfer of assets would facilitate the privatization process but Napocor would need the consent of its creditors such as JBIC, ADB and WB before the actual transfer is done. Since all the creditors have yet to agree on the lock, stock and barrel transfer of assets, they have agreed on only a partial transfer.
Early this year, WB and JBIC agreed to give their consent on the transfer of the assets of Napocor which were sold last year to their new owners.
The WB’s and JBIC’s consent covers the following generation assets: the 3.5-MW Talomo hydroelectric plant (HEP) in Talomo, Davao City; the 1.6-MW Agusan HEP in Manolo Fortich, Bukidnon; the 1.8-MW Barit HEP in Buhi, Camarines Sur; the 0.4-MW Cawayan HEP in Sorsogon City, Sorsogon; and the 1.2-MW Loboc HEP in Bohol.
The buyers of these plants are the following: Hydroelectric Development Corp., First Generation Holdings Inc., Ramon Constancio, Sorsogon II Electric Cooperative Inc., and Sta. Clara International.Under the bidding rules, PSALM has to secure the approval of Napocor’s creditors 270 days after the signing of the sale agreement. These five assets were sold from March to August 2004.