MANILA, Philippines - The government, through the Power Sector Assets and Liabilities Management Corp. (PSALM), has raised almost $20 billion from the privatization state-owned power assets as of October 2014.
Based on the latest status report on the implementation of the Electric Power Industry Reform Act (EPIRA) of 2001, the landmark power reform law that mandated the privatization of the power sector, specifically the power assets of the National Power Corp. (Napocor), PSALM has generated total proceeds of $19.9 billion, of which actual collection amounted to $9.3 billion.
“The proceeds were utilized for debt prepayment, regular payment of debts and (IPP) independent power producer obligations, and payment of other privatization-related expenses,” the report said.
Furthermore, of the $9.1 billion privatization proceeds utilized, $7.8 billion was used for the liquidation of financial obligations.
“The difference between the total amount collected and total utilization in the amount of $1.156 billion is placed in temporary investments while awaiting utilization,” according to the report.
One of the big-ticket power assets privatized last year is the Angat Hydroelectric Power Plant (HEPP) in Bulacan which was sold to Korea Water Resources Corp. (K-Water).
“PSALM turned over Angat HEPP to K-Water on Oct. 31, 2014,” the status report said.
PSALM still needs to sell several power plants with a total capacity of 1,600 to 1,700 megawatts and expects to raise $3.2 billion to $3.4 billion more from the sale of the remaining assets, which are lined up for privatization up to 2017.
PSALM is the entity created by the EPIRA, which mandated the privatization of the assets of Napocor.
Napocor, the state-owned generation company that suffered from mismanagement and corruption, had been a huge thorn on the government’s side for decades due to P500 billion in debts to its creditors, which the government had to absorb in 2005 to bailout the bleeding firm.
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