PSALM eyes P152 B from unsold assets

MANILA, Philippines - It’s still a long way to go before the government can complete the privatization of state-owned power assets, even after almost 13 years since Congress approved the landmark power reform law.

The Power Sector Assets and Liabilities Management Corp. (PSALM), the government corporation tasked to privatize state-owned power assets, still needs to sell several power plants with a total capacity of 1,600 to 1,700 megawatts, its top official said.

PSALM expects to raise $3.2 billion to $3.4 billion (P152.32 billion) from unsold assets that are lined up for privatization up to 2017, PSALM president Emmanuel Ledesma Jr. said in an interview over the weekend.

“There’s roughly 1,600 MW to 1,700 MW remaining. Assuming we privatize everything successfully, that’s about $3.2 billion,” Ledesma said.

PSALM is the entity created by the Electric Power Industry Reform Act (EPIRA) of 2001, the law that restructured the power industry by privatizing the assets of National Power Corp. (Napocor).

Napocor had been a huge thorn on the government’s side for decades due to its P500 billion in debt to creditors which the government had to absorb in 2005 to bail out the bleeding firm.

Napocor’s power assets include plants and contracted capacities of independent power producers.

The Department of Energy said that as of June 2012, the government had privatized generating plants with a total aggregate capacity of 4,115.2 MW.

Ledesma said roughly 80 percent of Napocor’s assets have been sold and only 20 percent remain in the pipeline.

The remaining assets up for privatization are the 32-MW power barge 104 in Davao, a large swath of the government’s contracted output with Unified Leyte Geothermal Power Plants in Leyte, the contracted capacity of the 210-MW Steag State Power Inc. coal-fired power plant in Misamis Oriental, the contracted capacity of the 140-MW Casecnan Multi Purpose Hydropower plant in Nueva Ecija, the contracted capacity of the 728-MW Caliraya-Botocan-Kalayaan (CBK) hydropower plant in Laguna and the 982-MW Agus-Pulangi hydropower plants in Mindanao.

For this year, Ledesma said PSALM is aiming to sell PB 104, a barge-mounted bunker-fired diesel generating power station, which began operating in 1985.

The bulk contract of the Unified Leyte, meanwhile, will be up for privatization in the first quarter of next year, Ledesma said. 

Unified Leyte is composed of the 125-MW Upper Mahiao, 232.5-MW Malitbog, 180-MW Mahanagdong and the 51-MW plants, all located in Leyte.

For the Steag coal plant’s contract, Ledesma said PSALM would also try to sell this by the middle of next year. 

Another asset up for privatization next year is the contracted capacity of the 140-MW Casecnan hydropower plant, which is part of the Casecnan Multipurpose Project, a combined irrigation and hydroelectric project of the government.

For 2016, PSALM is targeting to sell the contracted capacity of the CBK plant, a facility commissioned around 1942 and considered to be the first and oldest hydroelectric power plant in the country.

PSALM will also privatize the 982-MW Agus-Pulangi hydropower plants in Mindanao in 2017, Ledesma said.

“For Agus-Pulangi, 2017 would be the earliest,” Ledesma said. Mindanaons have opposed the privatization of the hydropower facilities, the main source of power in the island.