State-run Power Sector Assets and Liabilities Management Corp. borrowed a $1.1-billion syndicated loan from five banks last month to pay for the debts of National Power Corp., its top official said.
“After we secured all the required approvals and clearances, we proceeded with the execution of the syndicated loan on March 28, 2019. Thereafter, all the conditions precedent & deliverables for drawdown were completed last week so the drawdown happened on May 16, 2019,” said PSALM president Irene Joy Garcia.
Garcia said five banks participated in the borrowings, namely Mizuho Bank Ltd. ($300 million), MUFG Bank Ltd. ($300 million), Sumitomo Mitsui Bank Corp. ($300 million), Development Bank of the Philippines ($100 million) and Land Bank of the Philippines ($100 million).
Garcia earlier said due to overdue accounts of some power companies to PSALM, the agency was constrained to resort to borrowings that the national government guarantees “in order for PSALM to timely fulfill its mandate of liquidating the financial obligations of Napocor.”
“In fact, in 2018, PSALM borrowed about P23 Billion to cover its maturing obligations,” she said.
She said PSALM had to pay interest, guarantee fees and other finance charges of about P2.62 billion a year. Garcia said that the independent power producer administrators and electric cooperatives paid the government, PSALM would not incur the huge additional costs.
PSALM earlier said IPPAs and electric cooperatives dominated the list of the top corporate entities with long overdue accounts with the agency, amounting to a combined P59.23 billion as of December 2018.
Many of these accounts were transferred by Napocor to PSALM by virtue of Electric Power Industry Reform Act of 2001, or Republic Act 9136, in 2001.
Several IPPAs have pending overdue accounts with PSALM amounting to P28.46 billion as of December 2018. Some of the IPPAs are contesting the amounts in courts or in arbitral tribunals.
The PSALM report also listed 10 electric cooperatives and industries with the largest unpaid obligation due to PSALM, or a combined P28.74 billion.