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March 26, 2009

Seven groups eyeing 600MW Philippine power plant

Seven local and foreign groups have expressed interest to acquire a 600-megawatt coal-fired Philippine power plant after a unit of French utility Suez backed out of a deal to buy the facility, Reuters quoted a government official as saying Wednesday.

Suez unit Emerald Energy Corp made a winning bid of $786.5 million for the Calaca plant, south of Manila, in an auction in 2007. But it said in January it could not complete the deal after the condition of the plant deteriorated.

"There are new ones. Both local and foreign firms have signified interest to participate in the Calaca bidding," Jose Ibazeta, president of the Power Sector Assets and Liabilities Management Corp (PSALM), told reporters.

"Some are investors from Europe, US, Thailand and China," he said, declining to identify the companies.

PSALM is the state agency tasked with selling the assets and managing the debts of the National Power Corp, the country's biggest electricity producer.

Ibazeta said PSALM was aiming to sell facility in the first half of 2009, following two failed auctions.

He said investor interest in the coal-fired plant remained high despite the global financial crisis, and most prospective bidders for Calaca would be first-time investors in the Philippines.

Another asset PSALM hopes to sell within the year is a 620-MW diesel power plant northwest of the capital, which also failed to sell at two earlier auctions, the latest in January.

Since 2005, the government has sold 12 power plants worth a total of nearly $2.4 billion, according to PSALM's website

In January, the state handed a 25-year licence to a consortium led by China's State Grid Corp to run the country's power grid after the group made a winning bid of $3.95 billion in 2007, in what was the Southeast Asian nation's biggest privatisation deal.

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