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Brix Lelis - The Philippine Star
February 7, 2025 | 12:00am
MANILA, Philippines — The privatization of a massive hydro complex in Laguna has hit a roadblock, with Power Sector Assets and Liabilities Management Corp. (PSALM) scrapping the ongoing auction process.
PSALM is set to conduct a rebidding for the 797-megawatt (MW) Caliraya-Botocan-Kalayaan (CBK) hydropower complex, the only operating pumped-storage hydro facility in the country.
The state-run firm said the new auction round aims to “optimize the assets to be privatized and to give maximum value to its stakeholders.”
“PSALM hopes to attract significant interest from industry players and invite robust participation from potential bidders,” it said.
This goes against the earlier pronouncements from energy officials, who had expected the auction round to move forward in April.
In a chance interview, Energy Secretary Raphael Lotilla declined to comment when asked for further details regarding the matter.
Last August, PSALM conducted a pre-proposal conference for the CBK complex that drew the interest of five industry players.
These companies include Japan’s Marubeni Corp., Semirara Mining and Power Corp. of tycoon Isidro Consunji, Lopez-led First Gen Group, Ayala Group’s Giga Ace 11 Inc. and Thunder Consortium consisting of Aboitiz Renewables Inc., Electric Power Development Corp. and Sumitomo Corp.
CBK was supposed to be the major privatization of PSALM last year and is a priority source of the government’s non-tax revenues.
But the privatization was stalled while awaiting the Energy Regulatory Commission’s issuance of the pricing scheme for the third green energy auction round (GEA-3).
The STAR previously learned that GEA-3, which involves over 4,000 MW of pumped-storage hydro capacity, appeared to have lowered the value of the CBK complex.
“PSALM would have been able to privatize that even without GEA-3, but the concern of the Department of Finance was to enhance the privatization value of CBK. That’s why it got delayed,” Lotilla said in a previous interview.
The government earlier expected to raise as much as P100 billion in proceeds from the CBK privatization, which could help plug the deficit of the cash-strapped PSALM.
PSALM president and CEO Dennis Edward dela Serna told lawmakers last October that the state firm was on track to privatize and turn over the CBK complex to the winning bidder this year.
The asset is currently governed by a 25-year build-rehabilitate-operate-transfer contract and power purchase agreement between CBK Power Co. Ltd. and National Power Corp. that will expire in February 2026.
