Napocor debts hit P900 billion as of December 2000

A whopping P900 billion and still rising.

This is how much state-owned National Power Corp. (Napocor) owes foreign and local creditors as of last year, Napocor officials announced yesterday.

But this doesn’t worry the cash-strapped power firm since taxpayers are expected to shoulder some P200 billion of this amount once the Omnibus Power Sector Reform (OPSR) bill is passed by Congress.

The P200 billion represents Napocor’s obligations and other costs in privatizing power generation companies, small power utility grids and transmission companies.

President Arroyo had earlier wanted to shelve the OPSR bill because the government, itself strapped by a gaping budget deficit, would be spending more than it would be earning if the measure is passed.

But the country’s economic managers had cautioned the President against such a position because the country’s multilateral creditors like the International Monetary Fund (IMF) and World Bank (WB) would not be impressed by such a move.

The Department of Finance (DOF) also said several loans would not be released if the government fails to implement the reforms under the OPSR bill.

Other power sector players, however, withdrew their previous support of the OPSR bill because vital reforms that would make power cheaper for consumers were allegedly dropped.

Instead, the focus of the much-debated and much-revised OPSR bill is now on the debt load of certain assets that would later be sold by the government.

Napocor officials said the power firm’s debt load was already 12 percent higher that its 1999 level of P801 billion but this is expected to rise further this year due to another foreign loan.

While Napocor has promised its creditors that it would reduce its debt service ratio, Napocor later this year plans to float debt papers amounting to some $300 million to pay off maturing debts amounting to $144 million from investment bank ING Barings.

The bulk of the power firm’s debt load is from foreign-denominated loans which stood at some $16.38 billion, or about P820 billion, in 2000.

Of this foreign debt, about $10 billion, or P499.98 billion was incurred by independent power producers (IPPs). Last year, IPP contracts also cornered the bulk of Napocor loans amounting to P438 billion.