PSALM to sell CBK hydro plant next
By Myrna M. Velasco – December 20, 2022, 9:19 AM
from Manila Bulletin
State-run Power Sector Assets and Liabilities Management Corporation (PSALM) is lining up the 728-megawatt Caliraya-Botocan-Kalayaan (CBK) hydropower plant next in the auction block for the continuing privatization of government-owned power assets.
According to PSALM President and CEO Dennis Edward A. Dela Serna, a two-step process of divestment is currently being explored for the biggest hydropower facility in the Luzon grid. The sale is targetted by 2024.
“The CBK plant has IPP (independent power producer) contract until 2026, so one of the ways we’re looking at is IPPA (IPP Administrator) first; then once the plant is turned over, we will go for full privatization,” he explained.
Under an IPPA arrangement of asset divestment, it will be the supply contract first of the plant that shall be handed over to the private sector buyer – and the taker will be the one to sell or trade the capacity of that plant to off-takers or offer it via the Wholesale Electricity Spot Market.
“For CBK, we already had investor forum, so the turnover date for CBK is in 2024. So that’s proceeding after we privatize Casecnan (hydro plant) next year,” he stressed.
The CBK hydropower plant is currently under a 25-year build-rehabilitate-operate-transfer (BROT) contract with its Japanese operator, the joint venture of Electric Power Development Company Ltd. (JPower) and Sumitomo Corporation.
Back in 2016, PSALM explored the possibility of the facility’s buyout, but that plan was never concretized, hence, the next option of the current administration is to finally pursue its privatization.
The CBK plant is one of the four remaining large-scale power assets previously transferred to PSALM from precursor-owner National Power Corporation. The others are the 165MW Casecnan hydropower plant which is due for divestment next year; the 932MW Agus-Pulangui hydropower complex in the Mindanao grid; and the 210MW Mindanao coal plant.
On the Agus-Pulangui asset, he indicated that there is currently no concrete decision for its proposed privatization; and PSALM will need to seek first the imprimatur of Congress on that.
“For Agus-Pulangui, no plans because it requires Congressional approval under the EPIRA (Electric Power Industry Reform Act),” Dela Serna said.
He added that in the case of the Mindanao coal plant, the company has yet to get final guidance from its principals at the Department of Finance (DOF) and Department of Energy (DOE) if the planned energy transition mechanism (ETM) financing package for the facility will still be pursued.
“In the past administration, the Mindanao coal plant was being offered under ETM…there are discussions with consultants — whether or not that is still the plan under the current administration is to be determined,” the PSALM chief executive emphasized.
