IFC to assist TransCo bid winner

The winning bidder for the 25-year concession of the National Transmission Corp. (TransCo), the country’s sole power transmission provider, has been assured of financial assistance.

This as the International Finance Corp. (IFC) said it was prepared to provide financing support to the winning concessionaire. The IFC is the private sector investment arm of the World Bank.

"IFC would be pleased to consider working with the winning bidder on mutually acceptable terms, in an effort to determine the feasibility of the proposed financing and the potential for IFC support," Vipul Bhagat, IFC country manager for the Philippines and Thailand, said in a letter addressed to the Power Sector Assets and Liabilities Management Corp. (PSALM), the agency tasked by government to privatize the TransCo assets.

Bhagat added that debt financing, quasi-equity or equity investment would be subject to IFC’s "comfort with the shareholding group, a satisfactory completion of legal, environmental, technical and financial due diligence, approval by IFC’s management and board of directors, and execution of mutually satisfactory documentation."

IFC extends attractive interest rates from its financing programs aimed at development projects. Likewise, it infuses equity with an option to sell its stake to the lead entity of a development project.

PSALM president and chief executive officer Nieves L. Osorio said the IFC offer affirms the multilateral lending agency’s faith in the country’s power sector.

"It also encourages potential bidders to participate in the final bidding for the TransCo concession set in November," Osorio said.

Three interested bidders for the concession had submitted their prequalification proposals to PSALM last month. Government is expected to announce the qualified bidders as soon as it completes the deliberation and validation of the financial and technical capabilities of the three investor groups.

IFC, which provides financing for projects in less developed countries and promotes private enterprise in developing nations, has substantially invested in the Philippine power sector since the 1960s.

Bhagat said the IFC is prepared to invest between $2 billion and $5 billion more in the Philippines in the next three to four years. Since 1962, IFC has invested $2 billion into various projects in the country.

Among the key sectors for IFC’s direct investments or assistance in enticing foreign investors to invest, are in infrastructure, tourism, information technology (IT) especially the business processing outsourcing (BPO) sector, electronics, and energy.

Next in the priority list are investments in water, medical tourism, financial sector, and the mining sector.