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SPC is new owner and operator of Naga power plant in Cebu

THE Power Sector Assets and Liabilities Management Corp.(PSALM) on Thursday turned over the 153.1-megawatt (MW) Naga power plant to its new owner, SPC Power Corp.

“Effective 10 a.m. on September 25, 2014, coinciding with the lapse of the Operation and Maintenance Service Contract [OMSC] of the Naga power facility, SPC is the new owner and operator of the Cebu-based power facility,” PSALM President and CEO Emmanuel R. Ledesma Jr. said.

The state firm conducted the bidding for the Naga power plant on March 31, wherein Therma Power Visayas Inc. emerged as the highest bidder with its bid price of P1.09 billion, and SPC as the second bidder at P859 million.

However, the condition of the sale provides that SPC has the “right to top” the price of the winning bidder for the Naga plant by 5  percent, as provided under the Land Lease Agreement executed between PSALM and SPC for the Naga Land-based Gas Turbine in 2009.

On May 20  SPC wire-transferred to PSALM’s account a total of P1.14 billion, which is 5 percent higher than the P1.09-billion offer of Therma Power.

PSALM then issued on July 30 the notice of award  and the certificate of effectivity (CoE) to SPC, together with one original executed copy of the final transaction documents, which consisted of the asset purchase agreement (APA) and the land lease agreement  for the sale of the Cebu-based power plant. The award was in accordance with the decision of the PSALM’s board of directors in its meeting on July 25.

“The CoE  prompts SPC to fully comply with and complete all the conditions for the closing of the sale of the Naga power plant,” Ledesma said, adding that SPC delivered on August 8 its performance bond, which is required upon effectivity of the APA and valid until the date of the turnover.

The Naga power plant consists of the 52.5-MW Cebu 1 and the 56.8-MW Cebu 2 coal-fired thermal power plants; and the 43.8-MW Cebu Diesel Power Plant 1, composed of six 7.3-MW bunker-C fed power units. Specifically situated in Colon, Naga City, Cebu, these power plants use a combination of coal, bunker C oil and diesel as fuel.

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