Members of Zamboanga Electric Cooperative (Zamcelco) approved through a general assembly held yesterday the P2.5-billion deal with an investor-manager that would help bring the debt-saddled power distributor to recovery.
Zamcelco said in a statement that with the contract now in full effect, the joint venture of Crowninvestments Holdings Inc. and Desco Inc. would be able to pay off P1.5 billion of Zamcelco’s debts as well as upgrade electrical facilities.
According to Zamcelco, the joint venture’s returns on the contract would depend on performance-based targets. Thus, it will be their loss if they fail to meet the performance targets of meeting National Electrification Administration-approved systems loss and collection efficiency ratings.
According to NEA, Zamcelco incurred about P2.1 billion worth of debts mostly owed to power suppliers but also including a P373.9-million loan from the NEA as of Aug 9 this year.
Operations-wise, NEA said the cooperative was losing about 22 percent of its electricity supply —or “systems loss”—which was way over the maximum 13 percent allowed by the Energy Regulatory Commission.
Last week, NEA administrator Edgardo Masongsong described as “hard-to-refuse” Zamcelco’s deal with the consortium of Crowninvestments and Desco.
Desco, which is based at the Laguna International Industrial Park, specializes in rehabilitating power plants in partnership with a subsidiary of the United Kingdom-based Wood Group.
Crowninvestments Holdings is looking at investing in various energy and infrastructure projects in the country, led by lawyer Jomar Castillo, a former executive at PNOC Exploration Co.