CBK privatization to push through in April

MANILA, Philippines — The auction for the privatization of a massive hydropower complex in Laguna has been moved to April this year, with the delay blamed on the earlier suspension of the country’s chief energy regulator.

The 797-megawatt (MW) Caliraya-Botocan-Kalayaan (CBK) hydro complex was intended to be the flagship privatization project of Power Sector Assets and Liabilities Management Corp. (PSALM) last year.

However, the privatization was stalled while awaiting the Energy Regulatory Commission’s (ERC) issuance of the pricing scheme for the third green energy auction (GEA-3), according to Energy Secretary Raphael Lotilla.

“The only reason why it has been delayed is that the price determination methodology was supposed to have already been acted upon by the ERC in October, but Chairman (Monalisa) Dimalanta was suspended by the Ombudsman,” Lotilla said.

Dimalanta was suspended in September for alleged grave misconduct, abuse of authority and conduct prejudicial to public service but was later reinstated after the Office of the Ombudsman overturned the decision.

Lotilla said the issue at the ERC “cascaded in all the delays, which is why we could not proceed” with the CBK privatization.

The STAR previously learned that GEA-3, which involves 4,250 MW of pumped-storage hydro capacity, appeared to have lowered the value of the CBK complex, the only operating pumped-storage hydro facility in the country.

“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 underscored.

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.

If the bidding for the CBK complex pushes through this year, then it will closely coincide with GEA-3, whose auction proper is scheduled for next month.

Energy Undersecretary Rowena Cristina Guevara explained that CBK privatization would be impacted by GEA-3, as the latter’s pricing scheme would determine the price per kilowatt-hour for new projects entering the market.

“CBK is also a pumped-storage hydro, and it is old, so its pricing will be affected. That’s why the auction was moved to April (2025) instead of being held in November (2024),” Guevara noted.

In October last year, PSALM president and CEO Dennis Edward Dela Serna told lawmakers the state firm was on track to privatize and turnover the CBK complex to the winning bidder this year.

Currently, the asset is 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.