The Power Sector Assets and Liabilities Management has settled its $5.18- million debts incurred in 2003.

In a statement, PSALM said it prepaid the Export Credit Facility obtained by the National Power Corp. in 2003 from the Erste Bank der Oesterreicheischen Sparkassen AG, one of the largest bank groups in Austria .

The loan was extended by EBOS to finance Napocor's procurement of equipment and supplies for the rehabilitation of the Agus Hydroelectric Power Plant six years ago.

PSALM prepaid the outstanding amount of EUR 3,519,859.87 or $5,158,706.63, with applicable interest, of the credit facility as it took advantage of current low interest rates in the market.

PSALM said that because of the pre-payment they were able to save $180.4 million, which included savings in interest and guarantee fee. Proceeds from the privatization of National Power's assets were used for the prepayment.

The PSALM board approved the prepayment on Aug. 29 following consent given by Napocor on May 14.

"The successful prepayment became possible through the support provided by the Bangko Sentral ng Pilipinas and the Department of Finance, which ensured the smooth processing of the payments,” PSALM said.

Aside from savings on interest payments and guarantee fees, the prepayment reduced Napocor's foreign currency debt by 0.0081 percent and subsequently increased the peso component of the debt currency mix.

The settlement was made a day before PSALM successfully bid out the management of the contracted capacities of the San Roque, Bakun, and Benguet hydroelectric power plants on Dec. 15.*PNA

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