The government has cashed in a total of P4.2 billion from the sale of the 650-megawatt Malaya Thermal Power Plant (MTPP) and related real estate) to Belgrove Power Corp., according to Power Sector Assets and Liabilities Management Corp. or Psalm.
The amount consists of P3.12 billion for the assets and about P1.1 billion in fuel inventory that comes with the two units—300 MW and 350 MW of oil-fired generators.
Psalm said in a statement that with their receipt of the payments and the turnover of the assets to Belgrove, the company is now the owner and it may now begin conducting an extensive assessment of the MTPP and pursue all its plans for the plant.
Located in Pililla in Rizal province, MTPP was designated as a “must-run” unit by the Department of Energy to address supply deficiency when operating power plants in the grid suddenly become unavailable. But Psalm said Malaya would lose this status upon its turnover to the ne owner.
Negotiations for the sale of MTPP were completed in May 2020, with the bid of Belgrove’s parent firm, Fort Pilar Energy Inc. (FPEI), emerging better than lone rival AC Energy Corp.’s offer of P2.22 billion.
Both offers were considerably higher than the minimum bid price of P1.85 billion that Psalm set.
FPEI is into energy related projects mainly in the Zamboanga peninsula.
“[T]he completion of the sale and the turnover of the [MTPP] to Belgrove mark a major milestone in Psalm’s institutional history as Psalm has been trying to privatize this asset for several years already,” the state firm’s president Irene Besido-Garcia said in the statement.
“The amount of [P4.2 billion] will be used by Psalm to settle the remaining financial obligations that Psalm absorbed from National Power Corp.,” Garcia said.
According to FPEI, once the MTPP is repaired by Belgrove, it can supply electricity to the Luzon grid and help ensure sufficient power supply in anticipation of the upcoming 2022 national elections.
“We intend to undertake the necessary repairs as soon as possible so that the [MTPP] can resume operations,” FPEI president Joseph Omar Castillo said.