PSALM plans to tap capital markets

State run Power Sector Assets and Liabilities Management Corp. may tap the capital markets to raise up to P30 billion, if the sale of the 246-megawatt Angat power plant in Bulacan will not materialize this year.

In addition to government on-lending, PSALM is planning to generate funds through the privatization of the Angat plant.

“If the plant sale will not materialize this year, PSALM may tap the capital markets for its funding requirement but the Department of Finance has to decide on this,” PSALM president and CEO Emmanuel R. Ledesma Jr. said in an interview.

The funding deficit that PSALM hopes to cover amounts to about P60 billion.

“The amount (to be raised) is only an estimate and may change depending on how the foreign currencies move and on the existing plants’ performance this year,” Ledesma said.

Ledesma told the Inquirer that PSALM was still in discussions with Korea Water Resources Corp. (K-Water), the leading water resources and power firm in South Korea, for the turnover of the Angat facility. The target was to turnover the hydropower plant within this month.

“Both parties are working toward the earliest possible turnover of the asset,” he added.

Last year, the Supreme Court rendered as valid and legal the sale of the Angat power plant to K-Water, more than two years after the South Korean firm submitted its bid to PSALM.

K-Water topped the bidding in April 2010 for the Angat power plant with an offer of $440.8 million, besting some of the biggest power industry players in the country, such as First Gen Northern Energy Corp., San Miguel Corp., SN Aboitiz Power-Pangasinan Inc., Trans-Asia Oil and Energy Development Corp. and DMCI Power Corp.