Olongapo SubicBay BatangGapo Newscenter

Monday, October 31, 2005

Japan bank clears sale of Masinloc plant

Abigail L. Ho, Inquirer News Service

AFTER ABOUT A YEAR OF WAITING, THE Japan Bank for International Cooperation has finally given its consent to the sale of the 600-megawatt (MW) Masinloc coal-fired power plant in Zambales.

JBIC, one of National Power Corp.'s major creditors, was the last lender to issue its consent. The Asian Development Bank and the World Bank issued their consents in July and September, respectively.

"After careful consideration of the request [of the Department of Energy, Napocor and the Power Sector Assets and Liabilities Management Corp.] and in accordance with all existing loan agreements, we advise that Japan Bank for International Cooperation, for itself and on behalf of the lenders other than JBIC, hereby consents to the transfer of the ownership [of the Masinloc plant] from the borrower to the Power Sector Assets and Liabilities Management Corp.," JBIC director Manabu Homma said in a letter dated Oct. 28.

The lender likewise gave its nod to the transfer of the power plant to YNN Pacific, which won the auction with a $561.7-million bid.

PSALM president Nieves Osorio had earlier said that the completion of all required creditor consents for the plant also meant that the government could already request the transfer of the required 40-percent upfront payment of $222.8 million to the national government.

"The completion of the creditors' consent to the sale of the Masinloc facility is a boost to the privatization efforts of the government as it will encourage investors to enter the Philippine power industry and help expand the ownership base of generation companies in the country," she said in a statement Friday.

"This positive development will hopefully lead to more success in terms of bidding out the other [Napocor] facilities," she added.

PSALM is now working on getting the ADB, the World Bank and JBIC to issue "universal consents" for the transfer of Napocor assets to winning bidders in the future.

Under the current set-up, PSALM has to seek the Napocor creditors' consent before it can transfer each of the sold assets to their respective winning bidders.

With a universal consent, however, Osorio said winning bidders would not have to wait that long, enabling them to immediately take charge of the asset they had bought.

"The ADB is agreeable to a universal transfer. We've already made two rounds with our omnibus agreement. The World Bank has also sent us the revised draft of the agreement, also for a universal consent. We're just waiting for JBIC now," she said earlier, adding that there seemed to be no more hurdles to JBIC's issuance of its own universal consent


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