RP wants Q3 sale of 2 diesel power plants

The Philippine government wants to sell two Diesel Generating Set in the third quarter to remain on track with its energy privatization, a senior government official said on Thursday.

The sale would be separate from the 192.5 megawatt Palinpinon geothermal plant also up for sale this year, as the government revised an earlier plan to bundle one of the diesel plants with the sale of Palinpinon.

The government's goal of privatizing 70 percent of state-owned power plants is one step towards implementing open access and retail competition in the energy market.

An open access environment would help bring down power rates in the Philippines, where the cost of energy is among the highest in the region.

The state agency overseeing the sale of power plants owned by government-run National Power Corp (Napocor) earlier planned a joint sale of the 146.5 megawatt Panay diesel plant with Palinpinon, to make the diesel-fed plant more attractive to investors.

But the lack of a steam supply agreement for the geothermal plant has delayed the sale of the asset.

"If there is a stalemate on Palinpinon...We will go for the diesel plants," Froilan Tampinco, vice president of the Power Sector Assets and Liabilities Management (PSALM), told reporters.

"There is interest in the diesel plants because of the tight (power) supply in the Visayas," Tampinco said, adding at least two groups have expressed interest in the diesel plants.

All three of the plants are in the Visayas region, in the central Philippines.

PSALM now plans to sell the Panay diesel plant jointly with the 22-megawatt Bohol diesel plant in July while the geothermal facility is set to be sold in August.

In addition, Tampinco said five investors, including one Asian company, were interested in the 0.8-megawatt Amlan hydroelectric power plant located in central Negros Oriental province. The facility is set to be auctioned on June 25.

The government expects to raise about $1.5 billion from the sale of power generating assets with a combined capacity of over 1,000 MW this year after generating about $1.9 billion from the sale of three power plants last year.

The Philippines has so far privatized nearly 50 percent of its power generation assets.

Since 2004, the government has sold 10 power plants worth a total of $2.7 billion and a 25-year licence to run the country's power grid valued at $3.95 billion.