BOI to freeze perks for IPPAs

MANILA, Philippines - The Board of Investment (BOI) has suspended the granting of benefits to Independent power producer adminnistrators (IPPA).

The IPPAs are qualified private sector independent entities that administer and manage the contracted energy from the Energy Conversion Agreements (ECAs) and Power Purchase Agreements that the National Power Corp. (Napocor) entered into with the Independent Power Producer.

“We are not sure right now if they are worthy of BOI incentives,” BOI managing Head Cristino L. Panlilio said. The matter of suspending the incentives for IPPA was first discussed in July and was only approved last week by the BOI board of governors.

In a press conference late yesterday afternoon, he said that they have suspended the acceptance of IPPAs under the 2010 Investment Priorities Plan (IPP). “We are reviewing the whole principle of IPPA.” He said that they are checking the specific guidelines of the 2010 IPP to see how they can improve the IPPA before they can put it in active status again.

Panlilio said that he knows of five NAPOCOR plants that have already been acquired by IPPAs. Currently, there are no pending applications for IPPAs. He said there were three which were submitted under the 2009 IPP.

He said the three were given fiscal and non fiscal incentives. The BOI is in the process of coming out with a memorandum of agreement (MOA) for the three firms. “We are still putting together the MOA contracts to register them officially.”

He said the three will be the last to receive the incentives from the government.

According to the PSALM website, the IPPA process provides successful bidders a way to enter the Wholesale Electricity Spot Market (WESM) for a minimal capital outlay. The approach provides the administrators an opportunity to trade in the WESM without the expense of building a new plant.