Investors’ interest dulled in Mindanao coal asset

Some private investors have lost appetite to participate in the supply control for the 210-megawatt Mindanao coal plant due to the imposed three-year lock-in period on its power rates .

From initial 12 investor groups, this was cut into half following the decision of the Power Sector Assets and Liabilities Management Corporation (PSALM) on the power cost lock-in enforcement.

With that precondition, the independent power producer administrator (IPPA) for the facility will not be allowed to adjust the rates of the power plant within the prescribed timeframe.

It entails then that it will just temporarily settle with the existing tariff that operator Steag State Power Inc. had sealed with the National Power Corporation (NPC), the original counterparty in the facility’s power purchase agreement.

PSALM President Lourdes S. Alzona, in an interview with reporters, has qualified though that some groups formed joint ventures, hence the num- ber of parties bidding for the IPPA arrangement effectively dwindled.

“There are groups which formed a joint venture,” she stressed, while emphasizing that prior information had been given to the interested investors as to the proposed lock-in period on the rates.

Alzona said the initial 12 parties in the roll were the investors which attended the forum, but even in the procurement of bid documents, this was already down to just 10 or 11 parties. The questions raised on the rate colatilla, she said, will “still be subject to further evaluation” and will be decided with finality prior to bidding.

The worry of the government is for the Mindanao plant’s IPPA rousing upward adjustments in the ‘rate hikeallergic’ Mindanao grid.