Napocor seen to lose P113B next year

The National Power Corp. (Napocor) expects its net loss to increase by 51 percent to P113 billion in 2004, from a projected P75-billion loss this year, company officials said yesterday.

Napocor senior department manager for finance Lorna Dy said the loss should have been higher were it not for the expected proceeds from the new rates approved by the regulators under the long-run avoidable cost (LRAC); operational budget cuts; and efficiency in collection.

Napocor president Rogelio Murga said they expect to realize some P9 billion from LRAC rates next year.

Murga said the company is also expecting a P2-billion decrease in operational costs as a result of its cost cutting measures.

At the same time, the aggressive collection effort of the company is estimated to generate an additional revenue of P2 billion he said.

According to Dy, Napocor will need P165 billion for net financing requirement next year. This amount will include allocation for capital expenditures.

Napocor will need at least $1 billion for debt service and another $1 billion for the amortization of capacity fees to its independent power producers (IPPs) for 2004.

Power Sector Assets and Liabilities Management Corp. (PSALM) president Edgardo del Fonso said the power firm allots $1 billion for debt servicing every year. Of this amount, $500 million will be for principal and another $500 million for interest.

For 2003, Napocor has maturing debts of about $500 million. As of end-June 2003, Napocor had approximately $7-billion worth of debts, $800 million more than $6.2 billion recorded as of end-2001 but slightly lower than the $7.2 billion (P376.32 billion) recorded in end-2002.

The projected $7-billion debt stock does not include the $250-million loan which was partly-backed by the Overseas Private Investment Corp. of the US. The loan was finalized a few weeks ago.

These Napocor loans will be transferred to PSALM upon approval by the company’s multilateral creditors –Asian Development Bank, Japan Bank for International Cooperation and World Bank.