CBK privatization remains on track – PSALM

MANILA, Philippines — The privatization of the Caliraya-Botocan-Kalayaan (CBK) hydroelectric power plant could still be completed next year despite recent whispers of delays in the bidding process.

Located in Laguna, the 797-megawatt (MW) power plant is the major privatization project of the Power Sector Assets and Liabilities Management Corp. (PSALM) this year and is a priority source of the government’s non-tax revenues.

PSALM corporate planning specialist Recelo Celades told The STAR that the state-run firm is “still on track” to turnover the asset to the winning bidder next year.

“Participating qualified bidders for the CBK hydroelectric power plant privatization are promptly updated about changes, if any, in the privatization schedule,” Celades said.

However, a qualified bidder informed The STAR that it has yet to receive any updates from PSALM regarding the revised bidding schedule.

Earlier, PSALM said it was expecting the bidding process to start this year.

With less than three months remaining in 2024, the bidding round has been dragging on at a painfully sluggish pace.

The STAR previously learned that the CBK bidding would be indefinitely postponed, as the upcoming round of the green energy auction program (GEAP) appeared to have lowered the value of the asset.

The Department of Energy (DOE) is set to auction off 4,399 MW worth of impounding hydro, pumped storage hydro, run-of-river hydro and geothermal contracts for GEA-3 this year.

The auction round is said to be among the reasons why Meralco PowerGen Corp. (MGen) of tycoon Manuel V. Pangilinan bowed out of the bidding war for the CBK privatization.

“So, if there’s a GEAP for pumped storage, it would be difficult to value CBK if you’re competing for pumped storage and a GEAP,” MGen president and CEO Emmanuel Rubio said.

In August, PSALM conducted a pre-proposal conference for the CBK complex that attracted significant interest from five industry players.

These include Japan’s Marubeni Corp., Semirara Mining and Power Corp. of tycoon Isidro Consunji, Lopez-led First Gen Prime Energy Corp., ACEN Corp.’s Giga Ace 11 Inc. and Thunder Consortium consisting of Aboitiz Renewables Inc., Electric Power Development Corp. and Sumitomo Corp.

With CBK’s privatization, the government expects to generate up to P100 billion in revenue, which could help plug the deficit of the cash-strapped PSALM.

The CBK complex is currently governed by a 25-year build-rehabilitate-operate-transfer contract and power purchase agreement set to expire in February next year.

Earlier this year, PSALM and the National Irrigation Administration handed over the ownership of the 165-MW Casecnan power plant to First Gen subsidiary Fresh River Lakes Corp.

The First Gen group bagged the power plant after topping PSALM’s auction last year with a $526 million offer, which was way above the government’s minimum bid price.