Use of privatization proceeds to reduce borrowings

As of June 2010, actual privatization proceeds collected by PSALM from the sale of generation and transmission assets has amounted to US$4.42 billion. This includes other privatization-related fees such as lease rental, assignment of ROW, purchase price for land, and forfeiture of bonds.

The proceeds from the sale of National Power assets are used to service the financial obligations of National Power (e.g., prepayments of maturing debts, regular National Power debt servicing, servicing of IPP obligations).Of the privatization proceeds collected so far, PSALM has utilized US$4.089 billion for the following (as of June 30, 2010):

Prepayments

US$1.297 billion

Regular NPC Debt Servicing

US$1.600 billion

Servicing of IPP Obligations

US$1.095 billion

Privatization Related Expenses

US$0.097 billion

Total

US$4.089 billion