By Alena Mae S. Flores

Power Sector Assets and Liabilities Management Corp. will pre-pay close to $1 billion of debt owed by National Power Corp. after receiving a 40 percent down payment for the sale of the government’s transmission assets.

PSALM is expected to secure the payment of $987.5 million representing the 25 percent down payment for the right to operate the facility of National Transmission Corp. under a 25-year concession.

National Grid Corp. of the Philippines, which includes Monte Oro Grid Resources Corp. and State Grid Corp. of China, is set to make the payment to start operating the power grid over a 25-year concession period.

National Grid will complete the 25 percent down payment by Jan. 12 at the latest, Jose Ibazeta, president of PSALM said in a phone interview yesterday. About 40 percent of the $1 billion will be in US dollars and the rest in the local currency, Ibazeta said.

The National Grid consortium also includes Calaca High Power Corp. The local group of the consortium has already paid its share of $592.5 million while State Grid was expected to pay its share amounting to $395 million yesterday.

PSALM, which acts as the government’s privatization arm in the power industry, declined to confirm if State Grid made its payment late yesterday.

National Grid will pay the balance of nearly $3 billion in semi-annual installments over a period of 20 years. The consortium won the bidding after offering the highest bid of $3.95 billion in December 2007.

PSALM will turn over the management and control of the country’s transmission highway to the consortium next week.

The Electric Power Industry Reform Act requires all proceeds from the government’s privatization program, including TransCo, to be used as payment for Napocor’s obligations.

Napocor’s debts currently stand at nearly $8 billion, consisting of $5.734 billion is principal and $2.17 billion in interest payments.

Any residual Napocor debt after the privatization of the Napocor’s assets will be considered “stranded” and be paid by consumers through the universal charge component in electricity bills.

“We are ready to take over by Jan. 15 and we are excited and honored to be given the privilege of managing the national transmission grid,” a source from the national Grid consortium said on Thursday.

The consortium is led by Monte Oro, which is 100 percent owned by Monte Oro Resources and Energy Inc. of businessman Walter Brown.

Calaca High Power, meanwhile, is in the business of operating and rehabilitating energy systems and services for gas, steam and electricity.