In negotiated bid, PSALM sells Malaya thermal plant for P3 billion

MANILA, Philippines — State-run Power Sector Assets and Liabilities Management Corp. (PSALM) has finally privatized the 650-megawatt (MW) Malaya Thermal Power Plant (TPP) after it received a P3.12  billion offer.

In a statement Friday, PSALM said Fort Pilar Energy Inc. was declared as the winning party in the negotiated sale process of the Malaya TPP.

Fort Pilar bested the P2.22 billion offer submitted by AC Energy Corp.

Both offers surpassed the minimum offer price of P1.85 billion set by the PSALM board of directors for the negotiated sale process.

The sale of the Malaya TPP is on an “as-is where is” basis. The asset includes the 300-MW Unit 1 and the 350-MW Unit 2 as well as the underlying land, located in Pililla, Rizal.

“After several attempts to privatize MTPP the last two years, we are very happy to have finally received financial bids substantially above our minimum offer price. We are glad that this culminated in a successful privatization. PSALM definitely needs the proceeds of this privatization activity to pay for the remaining stranded contract costs and stranded debts. MTPP contributed to the losses of PSALM the past many years and so we really looked forward to selling it,” PSALM president and CEO Irene Besido-Garcia said.

Based on the 37th Electric Power Industry Reform Act (EPIRA) Implementation Status Report prepared by the Department of Energy (DOE), PSALM incurred an average annual net loss of P1.2 billion in maintaining the power asset from 2010 to 2019.

The results of the negotiation exercise will be subject to a post-qualification process to ensure that the winning party has met all the financial and legal requirements.