4 multilateral firms eyeing to finance P50-B Agus hydro plant rehab

By Myrna M. Velasco – September 6, 2018, 10:00 PM
from Manila Bulletin

At least four multilateral lending firms are in the queue and expressing willingness to finance the P50 billion Agus hydropower complex rehabilitation project of the government.

National Power Corporation (NPC) President Pio J. Benavidez. (https://www.napocor.gov.ph)

National Power Corporation (NPC) President Pio J. Benavidez.  https://www.napocor.gov.ph

In an interview with reporters, National Power Corporation (NPC) President Pio J. Benavidez disclosed that the initial interested parties to bankroll the project are the Asian Development Bank, the World Bank Group, Japan International Cooperation Agency (JICA) and a Chinese firm.

“After the feasibility study, we will bid out the (Agus) rehab project, then we will look at the funding sources available,” the NPC chief said.

He expounded that JICA has an offer of 1.5-percent interest rate; while the Chinese firm is dangling it at 2.0-percent rate. The World Bank, he added, also sets keen interest to be part of the project.
At this stage though, Benavidez emphasized that the priority is to re-analyze the rehabilitation options for the facility based on the feasibility study outcome of the World Bank.

The FS result will be sifted through anew by a third party consultant that will be working in tandem with the state-run power firm’s technical team. “We are the counterpart because we will provide the facilities and manpower,” he said.

It is a three-pronged approach that the World Bank has proposed to the government – primarily to NPC as the counterpart-implementer and the Power Sector Assets and Liabilities Management Corporation (PSALM), being the transferee-entity for the asset.

First option, the NPC president said, is to look at the rated capacity of the plant plus assess its safety protocols; while the second option delves with the requirement to increase its capacity from the level where it is currently de-rated at.

The last option will be combination of the first two plus improving water efficiency, via dredging or other solutions so the power facilities’ generation efficiency can be optimized.

Benavidez reiterated that financing of the planned Agus rehabilitation venture shall range from P37 billion to P50 billion, depending on the final scheme that shall eventually be implemented.

The privatization of the hydropower complex, Benavidez qualified, is not part of the current study – and may just be done separately in the future, including assessments on the policy impact of the newly-enacted Bangsamoro Organic Law, primarily on the cascading water resource powering the Agus complex.

The PSALM Board previously indicated that it targets to divest the hydropower assets after comprehensive refurbishment so the State can fetch heftier scale of proceeds.