PSALM targets further debt cut

MANILA, Philippines — State-run Power Sector Assets and Liabilities Management Corp. (PSALM) targets to further cut its debt by year-end as it looks to collect proceeds from the sale of the Casecnan hydropower facility in Nueva Ecija, as well as continue privatization and disposal of its remaining power plants and properties.

PSALM’s outstanding financial obligations are projected to decrease to P306.6 billion by December.

PSALM was able to trim its debt by P8.44 billion last year to P346.76 billion, and further to P315 billion by end-June.

“I would like to highlight that in 2003, the highest level of financial obligations absorbed by PSALM was P1.2 trillion and it is down now in June 2023 to P315 billion and we expect it to be about P300 billion in December of 2023,” PSALM president and CEO Dennis dela Serna said.

Dela Serna said PSALM hopes to continue servicing its remaining P315-billion worth of financial obligations, manage the privatization proceeds from various assets sales that we have done, and collect various receivables from power companies and certain cooperatives.

“With regards to liability management, we have reduced the financial obligations of Napocor (National Power Corp.) by 75 percent. We have collected P740 billion of privatization proceeds, we have settled about P2 trillion of borrowing costs, and we have remitted to the national government of about P10.7 billion of dividends,” he said.

Dela Serna said PSALM has so far privatized 45 generation assets equivalent to 9,026.68 MW, achieving 82 percent privatization level.

A total of 1,761 real estate lots equivalent to 1,060 hectares have likewise been disposed.

Last May, PSALM conducted a successful public bidding of the 165-MW Casecnan hydroelectric power plant, in which Fresh River Lakes Corp., a subsidiary of the Lopez Group’s First Gen Corp., emerged as the highest bidder.

Financial closing is targeted by December.

“Moving forward we hope to successfully close the privatization of Casecnan and collect $526 million from the winning bidder,” Dela Serna said.

Dela Serna said PSALM also wants to privatize and dispose its remaining power plants such as the 796.46-MW Caliraya-Botocan-Kalayaan (CBK) power plant complex in Laguna, the 200-MW Mindanao coal-fired power plant, as well as its remaining big ticket real estate assets in Bagac, Diliman, Sucat and Baguio spanning 72 hectares.

“And we hope to enter into a long-term rehabilitation plan for the Agus and Pulangi hyro power plants,” he said.