Pampanga power coop settles over P1B loan with PSALM

Power Sector Assets and Liabilities Management Corp. (PSALM) has received more than P1 billion from Pampanga II Electric Cooperative Inc. (PELCO II) as full payment covering the balance of a restructured obligation.

 

According to the state-run PSALM, it received in full on September 30 the amount of P1,095,346,131.75 from PELCO II.

 

“The amount of repayment sets the record as the biggest ever received by the government power firm from any electric cooperative for its outstanding obligation,” PSALM President and CEO Lourdes S. Alzona said.

 

“This will redound to the reduction of stranded debts of National Power Corporation,” Alzona added.

 

“If the debt of the NPC won’t be settled, taxpayers will be burdened. They will be the one to pay,” Recelo G. Celades of the PSALM Corporate Communications department said in a separate phone interview.

 

According to PSALM, PELCO II is the first cooperative to succeed under an investment and management contract program (IMC) of the National Electrification Administration (NEA).

 

PELCO II was able to prepay its restructured account with PSALM with the backing of the program and a loan from the Philippine National Bank.

 

The debt originally amounted to P1,431,946,972.37 and was supposed to be amortized within 10 years from October 2010.

 

 “It encourages ailing electric cooperatives to consider IMC as an option to address financial concerns,” PSALM Treasury Department Manager Manuel Marcos M. Villalon II said.

 

PSALM’s board of directors approved on October 2010 the restructuring of PELCO II’s unpaid power obligations.

 

PELCO II is currently under a 20-year IMC with Comstech Integration Alliance Inc. and its technical advisor Manila Electric Co.

 

Under the program, the investor-manager is expected to settle PELCO II’s debts with the NEA and its power supplier. – VS, GMA News