MANILA, Philippines - The Power Sector Assets and Liabilities and Management Corp. (PSALM) has generated $19.4 billion from the sale of state-owned power assets of end-April this year or nearly 13 years since the passage of the law that privatized the power sector.
This is according to the 24th status report on the implementation of the Electric Power Industry Reform Act of 2001, the landmark power reform law. EPIRA privatized the assets of National Power Corp. (Napocor), the state-owned generation company which for decades had been a huge dent on state coffers due to its debts, which reached a whopping P500 billion at one point.
According to the latest EPIRA report, actual collection amounted to $8.5 billion.
“The proceeds were utilized for debt prepayment, regular payment of debts and obligations to independent power producers, and payment of other privatization-related expenses,” the report said.
Out of the $7.5-billion privatization proceeds utilized, PSALM used $7.4 billion for the liquidation of financial obligations.
“The difference between the total amount collected and total utilization in the amount of $0.951 billion is placed in temporary investments while awaiting utilization,” the status report also noted.
Of the $19.4 billion in privatization proceeds, revenues from generating assets amounted to $3.06 billion, while revenues from transmission assets amounted to $6.38 billion. The appointment of independent power producer administrators churned in $9.95 billion in revenues while the balance came from the sale of decommissioned plants.
Of the $7.5-billion privatization proceeds utilized, PSALM used $1.29 billion for debt prepayment, $4.34 billion for regular debt service, $1.80 billion for lease obligations and the balance for other expenses such as the operations of National Transmission Co. (Transco).
The privatization of the power sector has been ongoing since 2001 when EPIRA was passed but lack of investor interest in some of the power plants, some of which are problematic and old, has slowed down the process.