Philippines to split Leyte geothermal plants in planned privatization

Philippines to split Leyte geothermal plants in planned privatization Tongonan, Leyte Geothermal power plant, Philippines
Alexander Richter 6 Jun 2012

Philippine state asset management company PSALM expects to split the Unified Leyte geothermal plants in its privatization efforts planned for the fourth quarter of 2012.

Reported yesterday from the Philippines, the state-run Power Sector Assets and Liabilities Management Corp. (PSALM) is set to bid out the management of the contracted capacities of the 640-megawatt Unified Leyte geothermal facilities as part of the planned privatization of its power assets within the next several years.

It is expected that the privatization of the plants will happen in the fourth quarter of this year.

PSALM is planning to split into two the contracted capacity of the Unified Leyte complex to prevent market dominance by a single firm and to make the facility financially viable.

Given the large generating capacity of the Unified Leyte geothermal complex, PSALM earlier explained that there might not be that many companies left to take on the IPPA contract without breaching the so-called market caps on power generation in the Visayas. Meanwhile, those who may be allowed to acquire the Unified IPPA without breaching the caps might not have sufficient financial capacity.

Under the Electric Power Industry Reform Act (Epira), a company or group of related companies is barred from owning, operating or controlling more than 30 percent of the installed generating capacity of a grid or 25 percent of the country’s total installed capacity.
So as not to violate the market cap provisions under the Epira, the current bidding rules have indicated that capacities will be divided 60-40, which means that PSALM will bid out one IPPA contract for 384 MW and another IPPA contract covering the remaining 255 MW.”

Source: Business Inquirer