PSALM to sell 6 power plants, Ippa contracts

Power Sector Assets and Liabilities Management Corp. (PSALM) plans to sell six government-owned power plants and two independent power producer administrator (Ippa) contracts this year, in a bid to help plug an expected P85-billion deficit.

In an e-mail to reporters, PSALM president and CEO Emmanuel R. Ledesma Jr. said the government was planning to bid out the 650-megawatt Malaya thermal power plant in Pililla, Rizal; the decommissioned 225-MW Bataan thermal power plant; and Power Barges 101, 102, 103 and 104, which are moored in Visayas and Mindanao.

PSALM also targets to bid out the Ippa contracts for the 140-MW Casecnan multipurpose hydroelectric power plant in Luzon and the 640-MW Unified Leyte geothermal power complex.

Proceeds from the sale would be used to cover the agency’s cash shortfall.

“The programmed deficit comes from debt service, operational expenses (i.e. fuel and maintenance expenses) and IPP obligations. Debts maturing this year amount to $1.7 billion including principal, interests and IPP lease obligation,” Ledesma said.

Apart from the sale of the state-owned power facilities and contracted capacities, the government is looking at other options to raise P85 billion.

“In line with the government’s thrust to consolidate the liability management of government-owned and -controlled corporations with the sovereign, the Department of Finance will determine and finalize the borrowing structure to fund the projected P85 billion PSALM deficit,” he said.

“Other than direct borrowing through bonds or the syndicated loan market or on-lending from the DoF, the other options for PSALM to fund this gap include the liquidation of privatization receivables from National Grid Corp. of the Philippines and the acceleration of the sale of PSALM’s non-power assets (i.e. real estate, paintings etc.),” he further said.