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STATE-RUN Power Sector Assets and Liabilities Management
Corp. (Psalm) said Tuesday it is set to sign amendment
agreements with the World Bank signifying the creditor’s
universal consent for the transfer of the debts and
assets of the National Power Corp. (Napocor) and
National Transmission Corp. (Transco) to Psalm.
On
January 29, 2007, Psalm said it had received the
clearance from the Interagency Committee for the Review
of Foreign Loan Documents (IAC-RFLD) on three agreements
which amended the original loan agreements of Napocor
with WB-International Bank for Reconstruction and
Development (WB-IBRD).
The
amendment agreements are expected to be formalized in
March.
“Debt
and asset transfer has always been on the top of Psalm’s
list of major action items. This development will bring
government’s privatization efforts further forward, as
universal consent will impact on the attractiveness of
the assets and facilitate the transfer of power assets
successfully bid out to the new private owners,” said
Nieves Osorio, Psalm president and chief executive
officer.
She
added that creditor consent is a standard requirement of
banks and other financial institutions before its
borrowers could transfer ownership of assets acquired
using loans they extended. The consent of creditors such
as the World Bank is a major condition for the
successful privatization of Napocor assets.
The
amended loan agreements provide the terms for WB-IBRD’s
consent to the transfer of Napocor debts and assets to
Psalm as provided by the Electric Power Industry Reform
Act (Epira).
The
Project Agreement requires Transco to commit to the
objectives of the projects funded by the loan
agreements. The Agreement Amending the Guarantee
Agreement ensures government guarantee on the original
loan agreements will remain effective after the transfer
of Napocor’s debts to Psalm.
Without
the universal or omnibus consent, Psalm sought specific
creditor consent for each plant it successfully bid out.
It most recently secured specific consent for the
112-megawatt Pantabangan-Masiway hydro plant, which was
turned over to First Generation Hydropower Corp. in
November 2006.
Psalm is
now working on the specific consent for the 360-megawatt
Magat hydro plant which was successfully bid out in
December 2006 and awarded to SN Aboitiz Power in January
2007.
World
Bank is the second major creditor next to Asian
Development Bank (ADB) to give its universal consent to
the transfer of power debts and assets to Psalm.
On March
3, 2006, the Omnibus Amendment Agreement (OAA) was
signed between ADB and the Department of Finance (DOF),
Napocor, Psalm and Transco, expressly providing ADB
consent to the transfer of Napocor assets to Psalm and
Transco, and the assumption by Psalm of all loan
obligations of Napocor with the ADB.
The OAA
amended all loan agreements between ADB and NPC to
reflect these consents. |
