Arroyo signs energy bill

The Philippines House of Congress finally passed the long-awaited Power Reform Bill on 4 June to begin restructuring the country’s faltering power industry. Four days later, President Gloria Macapagal-Arroyo gave the legislation her signature.

The energy sector is an appropriate sector to start the reforms as its infrastructure is in a depleted state and pricing is uncompetitive.

The state-owned power supplier National Power Corp. (Napocor) is deep in debt amounting to $6bn. Napocor, which produces up to 80 per cent of the country’s electricity, does not have funds to invest the estimated $1bn required to meet rising demand.

With the new reforms, Napocor’s assets, which are valued at around $5bn, are likely to be purchased by big foreign power producers. Meralco, the largest energy utility in the Philippines, has responded to the reforms by establishing a new ventures division and initiating a restructuring programme.

Nuclear reactions

The Democratic People’s Republic of Korea (DPRK) has clashed with the International Atomic Energy Agency (IAEA) over demands made to verify the accuracy and state of completion of the initial report on the country’s nuclear materials.

In line with an accord signed by North Korea and the US in 1994, DPRK must stop its nuclear power programme in return for the construction of two light-water reactors funded by the US, Japan and South Korea.

The North Korean news agency said that the groundwork for the projects is yet to start, adding that the IAEA’s demands reflected its intention to cater to US hostilities towards North Korea.

The Bush administration has called for verification that north Korea was not building an atomic bomb and added that the nuclear programme will be a key topic when debate is reopened with North Korea.

Kelanitissa to improve balance

AES Corporation’s subsidiary, AES Kelanitissa (Pvt) Limited, has signed agreements with the Asian Development Bank (ADB) and ANZ Investment Bank to finance a $104m diesel-fired power plant in Sri Lanka. The plant will improve the thermal-hydro mix in the country.

AES is to own and operate the 163 MW plant, which will be located within the premises of the existing Ceylon Electricity Board (CEB) complex in the northern part of Colombo.

Electricity will be sold to the CEB under a 20 year power purchase agreement while the Ceylon Petroleum Corporation is to supply low sulphur diesel fuel to the power plant for the term of the agreement.

The plant will enter commercial operation in open-cycle mode by June 2002 and combined cycle mode by May 2003.

South China gets Light and Power

Hong Kong based China Light and Power Co. Ltd has signed an agreement with a number of companies in southwest China’s Yunnan province to build a 1200 MW power plant. The firm is expected to provide $460m of the a total $570m for the Diandong power plant.

The power plant is to play an important role in boosting power to the southern region of China where there is a power shortage.

Dr. Y. B. Lee, managing director of China Light and Power, said, “This project is another important step for China Light and Power in widening its geographical base into southwestern China, to take advantage and in support of the policy initiatives to develop the western regions of China.”

Indian projects face jeopardy

Work on the second phase of the controversial $2.9bn Dabhol power plant in India has been halted after the main US contractors failed to receive payment from the US energy company Enron for two months.

General Electric and Bechtel, holding a ten per cent share in Enron’s Indian unit, Dabhol Power Company, sent home 5500 workers in June. The 1440 MW project is 97 per cent complete and was due to have been commissioned within a few weeks of the withdrawal.

Meanwhile, another US power firm, CMS Energy, has also threatened to pull out of India. Chief executive officer, William T McCormick, said that authorities have failed to fulfil their promises.

Thaksin halves power commitment

Thai Prime Minister, Thaksin Shinawatra, has said that Thailand will meet only half of its commitment to buy electricity from Laos until there is an upturn in economic growth. The decision is a blow for the Laotian government which relies on hard currency from power sales.

Meanwhile, the Electricity Generating Authority of Thailand (Egat) has said that the construction of two coal fired projects will start early next year. The $1.2bn Union Power Development Co.’s 1400 MW plant at Hin Krut will be completed by 2004 and the 700 MW Bor Nok plant owned by Gulf Power Generation will be completed by 2006.