The energy chief said he will relay the country’s "invitation for investments" as he attended the ASEAN Energy Business Forum in Singapore.

Apart from the long-delayed privatization of the National Power Corporation’s (NPC) assets, the country is also getting problematic in cornering fresh investments to meet the country’s future electricity demand.

Forecasts are indicating the close of the supply-demand gap by 2010, or barely two-and-a-half years from now, but the government is still not cornering any firm commitments for new power investments.

Stakeholders in the power industry got baffled in a recent statement made by Reyes that investments for new capacity shall only be entertained after the privatization of the NPC assets.

"New capacity while it must be planned now will become a priority to build only after the privatization shall have been completed," the energy chief said.

The government is targeting 70-percent privatization of the NPC generation assets until end of next year, but the fulfillment of this goal remains uncertain.

Reyes similarly talked about reviewing "the privatization schedules ahead of us, not necessarily to alter them, but certainly to accelerate it;" noting that the Department of Energy (DoE) is fully supporting the proposed amendments to the Electric Power Industry Reform Act (EPIRA).

Power investors noted they cannot go ahead with their investments, both for expansion and greenfield projects, because of the lack of market for their planned capacity.

While the Wholesale Electricity Spot Market (WESM) is offered as an alternative, many are adamant on that prospect given very volatile prices at the spot market.

Secondly, lenders are not very keen on extending project loans without the capacity of the power plant covered by long-term supply contracts.

The energy secretary has not given his department’s direction as afar as attracting new investments are concerned, despite mentioning that "what is more important is to put in place a fair and level playing field for new investors to ensure longterm sustainability of supply."

The changing business environment catapulted by the advent of deregulation of power markets have set out new business risks that investors must deal with in the next round of capital infusion.

The restrictive regulatory environment is seen posing another dilemma; primarily in instances when there are rate freezes without assurance of energy cost recovery.

Other concerns rest on environmental constraints that may arise out of policies and public distrust on energy projects that run on typically controversial fuels, such as coal and nuclear. (MMV)