First Gen unit submits winning bid for Casecnan plant

Fresh River Lakes Corp, a subsidiary of First Gen Corporation of the Lopez group, submitted a  winning bid that dwarfed other offers for the165-megawatt Casecnan hydropower facility, the first power asset privatized under the Marcos administration.

According to sources privy to the outcome of the bidding carried out by state-run Power Sector Assets and Liabilities Management Corporation (PSALM) on Tuesday, May 16, the First Gen subsidiary offered $526 million million to acquire the Casecnan plant.

The winning tender of the Lopez firm dwarfed the price offers of the consortium of the EEI Power Corporation, Soosan ENS. Co. Ltd., Soosan Industries Co. Ltd. and Mapalad Power Corporation at $298.899 million; as well as that of the Neptune Hydro Inc. of the Aboitiz group at $258 million.

It was noted that First Gen’s win in that particular asset privatization will be very strategic because the Casecnan hydropower plant is situated close to its Pantabangan-Masiway hydropower facility in Nueva Ecija.

This additional capacity cornered by the First Gen/Energy Development Corporation group will reinforce the conglomerate’s stature as the major power producer in the country that has embraced clean energy technologies in its electric generating portfolio.

The Casecnan plant is not just adding up power supply to the Luzon grid, but it also serves as a main source of irrigation for farmers in its host-province of Nueva Ecija, touted as the rice granary of the Philippines; as well as neighboring provinces in northern Luzon.

The Casecnan asset is a run-of-river type of hydropower development, hence, it has very limited impounding area where the water from the reservoir flows into the plant’s powerhouse, down to the Pantabangan lake and into the irrigation channels.

The ownership of the Casecnan plant is a joint venture between PSALM and government-run National Irrigation Administration (NIA), hence, the two entities would also be splitting the proceeds from the sale.

The divestment of the Casecnan plant is a first key achievement of PSALM under the new administration. The proceeds will help pare the power sector liabilities that it has been managing to wipe out from its financial books.

Next up on PSALM’s privatization plan will be the 728MW Caliraya-Botocan-Kalayaan (CBK) hydro plant which is targeted by next year, and the Mindanao coal-fired power facility in Misamis Oriental.

The contentious part of PSALM’s asset divestment line-up will be the Agus-Pulangui hydropower complexes in Mindanao as this will require Congressional approval, and concurrence of the Bangsamoro Autonomous Region in Muslim Mindanao.

PSALM’s 25-year corporate life cycle will end by 2026 and is lobbying for extended existence via a legislation that shall be enacted by Congress – and that is an ongoing process with the relevant government authorities.