First generation sale by PSALM
The World Bank and the Japan Bank for International Co-operation (JBIC) have given consent, as creditors, for the Philippines Power Sector Assets and Liabilities Management Corp. (PSALM) to sell the first set of generation assets from the National Power Corp. (Napocor).
In a letter, the World Bank confirmed that its specific consent was unnecessary as the sale was not expected to materially affect the state-run power firm’s ability to carry out business.
The sale of the five Napocor generation assets is valued at about $5m and buyers include Hydroelectric Development Corp., First Generation Holdings Inc., lawyer Ramon Constancio, Sorsogon II Electric Co-operative Inc. and Sta. Clara International.
The Philippines National Transmission Corporation (Transco) is to spend $850m on projects over the next five years, a cut from the originally proposed $1.3bn but higher than the earlier approved $500m.
Two bids for KESC
The Karachi Electric Supply Co. (KESC) expected open bids from two investors wanting to acquire a 73 per cent share in the Pakistani state company. Saudi-sponsored group, Kanooz, and Pakistan’s Hasan Associates, were to submit their bids on 4 February.
The government is to retain a 25 per cent share in KESC, of which it is to offer 10 per cent to employees, and is expected to take representation on the board with three directorial positions. The government is expected to stay aloof from day-to-day management affairs.
The Asian Development Bank said it is willing to acquire a 7.5 per cent share in the corporation while the investment arm of the World Bank has indicated that it would be willing to finance KESC investors after the privatization.
Brazilian Energy Power Corporation has offered $500m investment to establish a 500 MW power generation plant and develop the infrastructure in Pakistan.
Paiton boost for Java planned
The Paiton I power plant in Indonesia is to have its capacity raised to 800 MW after International Power of the UK announced its intention to invest $1bn in the upgrade.
It is thought that the increased capacity of Paiton I might be the solution to the power shortage on Indonesia’s most densely populated island of Java.
CEO Philip Cox also said International Power planned to invest in other projects. He said: “We would do it gradually, but the (Paiton) project must be completed first. This does not mean that we are not interested in other projects.”
Indonesia’s Minister for State Enterprises, Mr Sugiarto, has admitted that many foreign investors have complained about the lengthy process of licence application and highlighted a challenge for ministers to speed up the process.
PowerGrid seeks $2bn investment
Loans totalling $2bn have been sought by PowerGrid Corp. in order to create a national grid system across India. Both the World Bank and the Asian Development Bank have been approached for $1bn loans as PowerGrid seeks to advance commissioning of the national grid to 2010, from the originally planned 2012.
PowerGrid chairman and managing director, RP Singh, said that the commissioning of the National Grid by 2010 would be possible in view of an early commissioning of the 2000 MW North Karanpura project.
Based on the existing CERC tariff provisions the company hopes to achieve a turnover of Rs35bn ($799m) and earn a profit of Rs8bn by the end of 2005.
El Paso Corp. sells Asia stake
The last major power portfolio owned by a US energy company in Asia is to be sold by the heavily indebted El Paso Corp., to raise an estimated $500m, accoridng to Reuters reports.
The fallout after the collapse of Enron in 2001 prompted many Western utilities to divest their assets in the region. El Paso Corp. currently wholly owns 1997 MW of capacity in Bangladesh, China, India, Indonesia, Pakistan, the Philippines, and South Korea. It has part-ownership in a further 2156 MW. In total, El Paso’s assets are reported to have an enterprise value of over $1bn, including debts.
El Paso has been reducing debt – cutting it by 3.4bn in 2004. Reports said the company would shift focus to its US and Brazil gas pipelines businesses.
Chinese bank may finance Indonesian power station
Indonesia’s state owned electricity company, PT Perusahaan Listrik Negara (PLN), has approached the Industrial Commercial Bank of China (ICBC) for the loan of $140m to finance the construction of two 50 MW coal fired plants.
The proposal was submitted in mid 2004 and the company said it hoped for a verdict in the near future. Construction is yet to start on the plants and the deadline for scheduled for operation is 2008.
The new power plants are seen as vital in the supply of electricity to the islands of Batam, Rempang and Galang, which currently have diesel power plants with high maintenance costs.
Customers in Batam suffered a power crisis for two months in 2004 due to lack of supply.
China: In a deal reportedly worth $450m, Siemens and Vattenfall have agreed to sell their joint 40 per cent interest in a power station in China to Chinese electricity group Huaneng and the Citic Group conglomerate.
China: Meiya Power Company Ltd is set to focus on its power business in Asia after PSEG Global LLC sold their 50 per cent interest to BTU Power Company.
China: A consortium of Chinese investors has purchased a 16 per cent equity position in the Hebei Hanfeng Power Generation Company Ltd from Vattenfall, following the Swedish company’s decision to withdraw from overseas investments to focus on the European market.
China: E-business service provider, Adroit Innovations, is to expand its business outside Singapore by purchasing Hong Kong Inc. Hai Yue Power Investment Company, in a deal worth $478m.
India: Punjab State Electricity Board will float global tenders to invite proposals for adding 1000 MW generation capacity and tie up with other states for a thermal power plant in Chattisgarh.
India: Engineering firm Larsen & Toubro Ltd (L&T) is entering the power generation business by setting up a 400 MW plant at Uttaran near Surat in Gujarat with an investment of Rs12bn ($274m)
Korea: An order in excess of $1m has been placed by Samsung Corp. with Capstone Turbine Corp. for 1.5 MW of microturbines that will be supplied to various projects including a hospital, a high rise apartment complex and a biogas project.
Pakistan: The World Bank has been approached by Pakistan to resolve the differences over Baglihar hydro power project being constructed by India in Jammu and Kashmir. The two countries share the waters of six rivers that flow from India into Pakistan.
Thailand: National Petrochemical Plc (NPC) is to spend around Thb1.2bn ($31m) to expand its power plant by 35 MW to cope with the rising demand of its petrochemical complex.
Vietnam: Electricity of Vietnam (EVN) is mapping out a strategy to prevent nationwide electric shortages between 2005 and 2007. In June and November, the northern provinces will be short between 390 MW to 1050 MW of electricity.
Pakistan: Wartsila is to convert an oil-fired power plant in Lahore to dual-fuel operation on liquid fuel and natural gas, along with three years maintenance. The customer is a power generation subsidiary of Century Paper & Board Mills.