PSALM sells 17 power plants as of March

MANILA, Philippines - State-run Power Sector Assets and Liabilities Management Corp. (PSALM) has sold off 17 generating plants with total rated capacity of 2,167 megawatts (MW) as of March 2009, the company said in a report.

PSALM said 15 of the 17 power plants that were auctioned off are located in Luzon and the Visayas. These include Tiwi-Makban package bid out in July last year, the Panay-Bohol plant package in November and the Amlan plant in December.

Aboitiz unit AP Renewables Inc., with an offer of $446.8 million for the Tiwi-Makban geothermal assets, was declared the highest bidder on July 2008.

Meanwhile, Singapore-based SPC Power Corp. offered the highest bid of $5.86 million for the 146.5-MW Panay (I and III) and 22-MW Bohol diesel power plants in a public bidding held last Nov. 12, 2008.

SPC’s offer exceeded the reserve price set by PSALM for the three power plants.

PSALM was also successful in bidding out the Calaca coal-fired power plant on October 2007. However, the winning bidder, Emerald Energy Corp. (EEC), formerly Calaca Holdco Inc., decided early this year to terminate its purchase, citing the alleged deterioration of the power plant.

Despite this, PSALM remains committed to privatizing 100 percent of the government’s generation assets and will also immediately prepare the Calaca plant for re-bidding.

Thus far, 14 generating assets have been turned over to private owners. These assets include the Panay I, Panay III and Bohol power facilities.

PSALM noted that the overall sale schedule for the privatization of generation assets may change depending on the confluence of factors such as investors’ interest and plant-specific concerns, including operations and maintenance agreements for multipurpose hydropower plants, fuel supply agreements (e.g. geothermal steam and coal), and land-related issues as among the major and critical ones. 

To optimize opportunities in privatizing the plants, PSALM is looking at an alternative sale mode of pairing or grouping a mix of plants under a portfolio and bidding them out as one.

The mode paves the way for PSALM to release publicly the specific timetable for the asset a few months before the bid date.

Based on the revised indicative sale schedule still subject to board approval, PSALM has lined up several power plants to be sold this year.

The schedule, PSALM said, may change and individual plants may be considered for pairing or grouping as may be viable.