PSALM receives $500-M government loan

MANILA, Philippines – State-owned Power Sector Assets and Liabilities Management Corp. (PSALM) announced that it has received a $500-million loan from the national government.

“For 2013, we have $500 million initial borrowing granted on end December. It’s already in PSALM account with BSP,” said PSALM president Emmanuel Ledesma.

The money will be used to pay the year’s funding requirements, which are expected to hit P60 billion. This amount is lower than last years’ total of P85 billion. The majority of the agency’s 2013 requirements will be used to pay for the privatization of power plants.

For this year, Ledesma said PSALM is determined to minimize its financing requirements “through on-lending from the national government and certain financial management strategies such as effective handling of its receivables from privatization and power sales and other disposable assets.”

PSALM’s debts as of September last year reached P640 billion, of which, P328 billion were loans and P311 billion were payments owed to independent power producers.

PSALM is now waiting for the Energy Regulatory Commission’s decision on an application it filed in June last year for the recovery of stranded debt and contract costs at P0.03 per kWh and P0.36 per kWh, respectively. It proposed to recover these for a period of 15 years.

PSALM was established to manage the existing debts of National Power Corp. and capital lease payments to independent power producers. It also manages the outstanding obligations of electric coops to the National Electrification Administration and other government agencies. – Rappler.com