Spot market launch to coincide with asset split
Proposals to speed up the sale of a majority stake in the state-owned National Power Corp (Napocor) are being considered by the Philippine government as part of a strategy to ensure the new wholesale electricity market is functional.
Under the accelerated plans, the government will sell off dozens of Napocor power plants, amounting to some 70% of its installed capacity, and the national transmission grid by the middle of the year, in order to coincide with the launch of the planned spot market. By law, there needs to be excess capacity before the spot market can start, but the cash-strapped company does not have the financial capability to boost capacity.
With $23 billion of debt, Napocorp needs to raise finance and hopes to deliver up to $5 billion through the sales, originally planned for the coming December. The group sold its first major generation asset late last year to a Filipino-Australian consortium for $560 million. It has also raised $5.16 million from the sale of five small hydro plants in 2004 and is now negotiating the sale of the 600 MW coal-fired Masinloc plant in Zambales for $561.7 million to YNN Pacific Consortium Inc.
State-run Power Sector Assets and Liabilities Management Corp (PSALM) is managing the sale schedule.