CEBU CITY—The Energy Department is working with the Finance Department to firm up possible funding of around $400 million from the Chinese government for the rehabilitation of the 982-megawatt Agus-Pulangi hydro power plants in Mindanao.
Energy Secretary Alfonso Cusi told reporters after an investment energy forum that the department was coordinating with Finance on the possibility of securing a loan from China to rehabilitate the power plants.
“It’s up for rehab… I think, (the) China government is providing $400 million. The direction is to rehabilitate and operate… Concession loans carry lower interest,” Cusi said.
Cusi said the department had not firmed up the entire cost of rehabilitation. He said rehabilitating the plant before its privatization would help increase the valuation of the plant.
“It’s under the EPIRA (Electric Power Industry Reform Act) that we have to privatize. Let’s rehabilitate first so we can generate better price,” the energy chief said.
State-run Power Sector Assets and Liabilities Management Corp. plans to start the rehabilitation of the plant by next year.
PSALM officer-in-charge Lourdes Alzona said the government was looking at rehabilitating the plant before privatizingit to generate more investor interest and higher value.
“There’s the oversupply, and then the condition of the plant. To improve the value, rehabilitate first. What is being looked at now is what type of rehab and when will it be completed,” Alzona said.
The official said PSALM was identifying several options for the rehab.
“Because there is oversupply (in Mindanao), let’s take advantage… until next year, we should rehab. We hope to start (next year). It will take time not only months, depending on what is being rehabilitated. We cannot do it simultaneously (all units),” Alzona said.
PSALM manages the assets and liabilities of National Power Corp. as mandated by the Electric Power Industry Reform Act of 2001.
PSALM is also tasked to privatize the remaining power assets of the government such as the Agus-Pulangi hydro plants in Mindanao.
The Finance Department is pushing for the rehabilitation of the Agus-Pulangi power plants before its privatization.
Some of the Agus units were constructed as early as the 1950s and many sectors have been calling for an extensive rehabilitation of the facilities so they can operate at an optimum efficiency.
Finance Secretary Carlos Dominguez, who also chairs PSALM, earlier said the facility, the biggest remaining power asset of the government, was operating at only 40 percent of its over 900-megawatt rated capacity.
“We have to fix it first… It’s operating only 40 percent of its total capacity so we think that if we use Chinese ODA (Overseas Development Assistance) money… We will get it up to speed, use it as baseload for Mindanao and then probably look at some kind of privatization, but not selling it,” Dominguez said.
