"Operating expenses will not be a problem. It is the maturing loans that need to be addressed," the sources said.
The Napocor, sources said, could use its income from energy sales to fund its operating expenditures. Earlier estimates show that the Napocor would need about $1 billion for its capital expenses this year.
Energy Secretary Vincent S. Perez hinted early this year that they might float bonds worth about $500 million to fund the capex of state-run power firm.
The bond flotation was initially scheduled for the latter part of 2002 but was postponed due to the Sept. 11 terrorist attack on the US. The financial advisor for the planned bond offering is US-based Bearstern.
Perez said if the Power Sector Assets and Liabilities Management Corp. (PSALM) will be able to dispose of the Transco assets of Napocor within the first two quarters this year, they need not raise the entire $1 billion.
Initially, PSALM expects to generate about $1.5 billion from the privatization of the transmission assets of Napocor. But the proceeds could go as high as $2.7 billion.
Last year, the Department of Finance (DOF) had agreed to piggy back for Napocor, borrowing about $500 million of the total $530-million financing requirement of the country’s largest power generation firm for the remaining five months of 2001. Part of the proceeds from the $500-million bond offering was used by Napocor to retire its $144-million debt from ING Bank which matured in December last year.
For 2002, the National Government has increased the budget of Napocor by about 43 percent to P232.37 billion, from P162.54 billion in 2001.
Bulk will cover, among others, the fuel and power purchase costs of the Ilijan combined cycle gas turbine power plant in Batangas; the operations of the Leyte-Mindanao and Leyte-Bohol interconnection; the rehabilitation of the Tiwi-MakBan geothermal power plants in Bicol and Laguna; and debt servicing.
Industry analysts said the increase in Napocor’s appropriated budget is a move to facilitate the smooth implementation of the privatization process of the country’s biggest power generation company.
Earlier, Napocor president Jesus N. Alcordo said if the improvement in energy sales would be sustained, the power firm could end year 2001 with a lower net loss of P9 billion, lower than 2000’s losses of P12.9 billion. For the first half of 2001 alone, Napocor’s net loss was pegged at P2 billion. It, however, reported a 6.5-percent increase in energy sales for the first half of 2001 from 17,502.56 gWH in the same period in 2000 to 18,639,44 gWh.