Region: East Asia and Pacific
Sector: Energy and Power
Keywords: Energy and Power, Energy and Power Core, East Asia and Pacific (EAP), Concession
Concession Contract (Philippines)
Key features of the Concession Agreements between PSALM, TansCo and NGCP:
- Concession Period – the concession runs for a term of 20 years.
- Transfer of TransCo’s Business – NGCP is entitled to exercise all of TransCo’s rights, and shall discharge all its liabilities and perform TransCo’s obligations under all existing contracts relating to the operations of the regulated transmission business.
- Title and Risk – TransCo retains title to all of the transmission and associated assets. Risk of loss of, or damage to transmission assets are to be borne by NGCP
- Concession Fee – NGCP must pay PSALM a concession fee for the grant of the Concession, which allows NGCP to operate TransCo’s transmission business and collect revenue from transmission network users.
- Reversion – at the end of the Concession Period (or on the Concession Agreement’s early termination), the transmission business is to be transferred back to PSALM and the PSALM is required to pay the NGCP a recovery payment, calculated with reference to NGCP’s unrecovered costs (including the net present value of the estimated future net cash flows of the transmission business for the remainder of the Concession Period, in the case of early termination).
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Updated: October 25, 2021