The first Investment Management Contract (IMC) in the Philippines is signed between Camarines Sur Electric Cooperative IV and Salcon Power. The World Bank must be ecstatic.
Some of the fundamental terms:
- Casureco IV “will retain its franchise …[and] ownership of its assets, as well as control over setting the standards of service to its customers”
- Salcon will infuse initial investment of P63 million
- Salcon will receive 4.25 percent of the gross revenue
Castalia Strategic Advisors (their Wellington, New Zealand arm) was apparently the “transaction advisor which conducted financial and technical evaluation.” (They also have a K Street office, of course). From their website “Castalia pioneered private sector management and investment in utilities around the world.”
David Ehrhardt of Castalia was in town two and half years ago talking about IMCs. This has been a long (and expensive?) effort. They also left a trail of goodies at the ERC – who certainly deserve it.
But I’m more intrigued by the almost religious-like fervor with which the WB is pursuing this. I don’t necessarily think this is a bad idea – I’m just astounded sometimes by their ability to orchestrate policy implementation (which, again, isn’t necessarily a bad thing) through so many of their agents.
Lots of discussion here on the concept of output based aid. I’m not exactly sure yet how or if IMCs fit into that. But it’s worth a few philosophical thoughts.
And … IMC’s don’t necessarily conflict with the thoughts referred to here of CDA Chair Juarez, but I’m just wondering how it’s viewed there.