K-Water expected to close sale of Angat hydroelectric plant

Business Mirror
by Lenie Lectura - Oct 7, 2014 

KOREA Water Resources Corp. (K-Water) is expected to finally close the sale of the 218-megawatt (MW) Angat hydroelectric power plant by end of this month, four years after it won the bid to privatize the facility.

“K-Water has signified its intention to close the sale by October 31, covering all approvals needed,” said Power Sector Assets and Liabilities Management Corp. (PSALM) President Emmanuel Ledesma Jr. in a text message.

The regulatory approvals include the Bangko Sentral ng Pilipinas’s (BSP) green light for K-Water’s loan application. Out of the $440-million payment, $340 million is the subject of the BSP application.

The dispute between PSALM and the former employees of National Power Corp. (Napocor) had adversely affected the supposed closing of the sale of the power facility.

Ledesma earlier said K-Water also received a notice of garnishment from the Quezon City Regional Trial Court’s sheriffs pursuant to the Supreme Court (SC) decision on June 30.

The SC lifted the garnishment order on September 10, following the motion for reconsideration sought by PSALM. Ledesma welcomed the lifting of the notice of garnishment because this allows it to continue operating its plants and pay off its debts.

Included in the garnishment order was the fee for the Angat facility. That garnishment order was lifted. However, the period within which to draw down the loan has already expired. Thus, K-Water sought for an extension from the BSP.

“They said the BSP extension will be issued mid-October,” Ledesma said.

There was also a case filed by non-governmental organizations questioning the constitutionality of the transaction with the SC. This also delayed the turnover of the assets to K-Water.

The High Court eventually upheld the sale of the Angat power plant to the Korean company.

K-Water, in April 2010, won the bid to privatize the facility. It placed a bid of $440.8 million. It was supposed to take over the facility late last year. Upon closing of the sale, the Napocor would no longer operate the facility. source