PSALM eyes Angat sale closing in Q1

MANILA, Philippines - The Power Sector Assets and Liabilities Management Corp. (PSALM), the government corporation tasked to privatize state power assets, is eyeing to close the sale of the Angat hydropower plant in Bulacan in the first quarter of 2014.

“We are looking at closing the sale of Angat hydro plant within first quarter 2014,” said PSALM president Emmanuel Ledesma Jr.

PSALM sold the 218-megawatt power facility to K-Water Resources Corp. of Korea.  It issued the certificate of effectivity (COE) to K-Water in September and is expected to close the sale within 270 days from the issuance of the COE.

PSALM held the bidding for the $440.88-million facility in 2010.

K-Water topped the bidding but was unable to take over the plant due to thorny issues including court hurdles raised by non-government organizations (NGO) on the foreign takeover of a power asset. 

The Supreme Court last year upheld the privatization of the power plant but K-Water had negotiated with the government for a lower price tab on the facility, saying it wanted the same level of benefits expected in its 2010 bid. 

Energy Secretary Carlos Jericho Petilla and K-Water officials have been in talks for months before finally reaching an agreement, which led to the awarding of the COE in September.

In the end, K-Water agreed to the original bid price of $440.88 million. K-Water partnered with diversified conglomerate San Miguel Corp. to run the power facility.

The privatization of Angat, once completed, would be the first successful power asset sale under the Aquino administration, as mandated under the Electric Power Industry Reform Act of 2001. 

K-Water will tap an initial $500-million bridge loan from the Korean Exim Bank to jumpstart the takeover. 

K-Water is optimistic that its investments in Angat is only the beginning of future projects in hydropower. 

Ledesma said in 2013, PSALM made major strides in terms of privatization of assets, including Power Barges 101, 102 and 103 and the selection and appointment of the independent power producer administration (IPPA) for the energy capacity of the Unified Leyte Geothermal Power Plant, both of which attracted the participation of practically all the major industry players as well as new and non-traditional participants.