Navotas Diesel Power Plants

cancelled

This 310-MW plant was built in two phases in the Navotas Fishport Complex in Manila. Phase 1, which consisted of three 70-MW turbines totaling an installed capacity of 210-MW, came on-line in 1991; phase 2, which consisted of a fourth 100-MW turbine, came on-line in 1993. The cost of phase 1 was US$44 million, and the cost of phase 2 was US$39 million. The project was sponsored by a Mirant (known as Southern Electric, Inc. until 2000) subsidiary Consolidated Electric Power Asia (CEPA, previously Hopewell Holdings) (50.1%) and by state-owned Napocor (49.9%). This was the first BOT project in the Philippines and a pilot project for broad national electric power privatization program. As of 1995, Phase 1 supplied 10% of all power for Luzon, the largest island in the Philippines. CEPA (the developer) added an additional Westinghouse gas turbine at Navotas following the governent's push to fast-track BOT's. This addition (Navotas II) came on-line ahead of schedule in 1993 to create a total of 310-MW of generating capacity. Napocor assumed the fuel supply risk for project lifetime. The Philippine government guaranteed Napocor's commercial obligations under its power purchase agreement (PPA), as well as guaranteeing off-take (under a take-or-pay contract) and providing incentives to exceed off-take limits through plant operations. The IFC and ADB provided complimentary debt financing. Napocor paid a capacity fee and an energy fee in US$. The Philippine government provided guarantees to the project and granted it "pioneer" status, which includes a 5-year tax holiday and waived import duties. In March 2003, the BOT agreement for Novotas I expired and the plant was transferred back to Napocor pursuant to the initial agreemnt. The Power Sector Assets and Liabilities Management Corporation (PSALM), the state agency handing the privatisation of power assets had hoped to sell the plant back to a private operator by end 2003, but this process was delayed. The BOT agreement for Navotas II was set to expire in July 2005. In April 2003, the Government pre-terminated the Navotas II contract. Of the contracts that have undergone first batch of scrutiny, at least three have been pre-terminated, including the Navotas plant operated by US firm Mirant Philippines Corporation. None