Total investments in Laguna power project to hit $470-M

Total investments of CBK Power Co. Ltd., which is owned equally by US firm Edison Mission Energy and IMPSA, will reach $470 million this year when CBK completes the rehabilitation and new construction work in the former state-owned power plants under a build-rehabilitate-operate-transfer (BROT) contract with the government.

CBK stands for Caliraya, Botocan and Kalayaan which are the names of the power plants covered by the project.

The project is doubling the capacities of the power plants, the Kalayaan I and II pumped storage plants, the Caliraya hydroelectric plant, and the Botocan hydroelectric plant, to a total of 769 megawatts from their original total capacity of 349 megawatts.

To date, over $400 million has been invested in the project, according to CBK Power with 97 percent of the total project completed. CBK Power said the power plants were in dire need of rehabilitation when they were turned over by the government to the firm. It said only one of four generator units in the Caliraya plant was fully operational and there was heavy leakage in its penstock. Its dam and spillway also needed rehabilitation when CBK Power took over.

The Botocan power plant, in turn, was operating continuously at 54-percent capacity with heavy leakage in the surge tank, while its dam and intake gates were heavily corroded, with no emergency spillway when it was turned over.

The Kalayaan Phase I power plant was also in dire need of rehabilitation in 1993, with key equipment in an advanced stage of deterioration when CBK assumed control of the plants.

The project also involved the construction of Kalayaan Phase II which have a rated capacity of 350 megawatts when completed. The second Kalayaan plant is expected to be completed in December of this year. The Kalayaan I, Caliraya and Botocan hydroelectric power plants have been rehabilitated and are operational.

Along with Kalayaan II, the company also built a new surface-type spillway on the Caliraya Dam. The newly completed New Caliraya Spillway has twice the capacity of the old underground-type spillway.

The company said the Kalayaan I and II pumped storage power plant complex is critical for the stability of the Luzon grid since it is the only pumped storage facility that absorbs the excess electricity produced by base load thermal power plants at night. At the same time, being located in Laguna, it is ideally located to provide a timely response for needed ancillary service with minimal transmission-related constraints.

The project is being financed through a $350-million loan from a syndicate of 17 banks and equity investments from IMPSA and Edison Mission Energy.

The projects is covered by the largest private political risk insurance in the world by a group of three international insurance companies. The financing and insurance packages for the project had won several awards including the best project finance deal from international publication Finance Asia, the Philippine loan of the year from IFR Asia, the power deal of the year from Project Finance International, deal of the year from Asia Money, best project finance from The Asset, and project finance deal of the year from the International Financial Law Review.