Napocor to raise P7B for its small power utilities

MANILA, Philippines - National Power Corp. (Napocor) is mulling to tap the debt market to raise P7 billion to finance requirements of its missionary electrification arm that provides electricity to remote areas not connected to any of the main grids. However, Napocor president Froilan Tampinco said any borrowing plans have to get clearance from the Finance department since it would need sovereign guarantee. It needs funding for its Small Power Utilities Group, which is subsidized by the government, since they do not form part of the government agency tasked to privatize Napocor assets called Power Sector Assets and Liabilities Management Corp.(PSALM). "We are trying to find out if the entry of private investment can be encouraged for the projects that we have so our borrowings can be tempered. It (borrowing) will depend on how much private sector investment will come in. We would expect that with private sector investment coming in, government subsidy will also be reduced," Tampinco said. State-run Development Bank of the Philippines is one of the banks Napocor is considering as financial advisor. Based on her 10-point development agenda, the Arroyo administration aims to provide electricity to remaining “unelectrified unviable" barangays. As the SPUG expects to triple the areas it operates to 286 from 86, this is a challenge for the government. In its universal charge for missionary electrification petition filed with the Energy Regulatory Commission in May, SPUG will need P87.76 million in subsidies for the next five years to support its operation and projects under the Missionary Electrification Development Plan for 2009-2013. The plan calls for it to prepare missionary areas to become viable and sustainable for eventual private investment by new power producers and qualified third parties. -GMANews.TV