PSALM taps PwC to draw valuation for Casecnan plant’s sale

Published December 12, 2021, 8:00 PM

by Myrna M. Velasco

State-run Power Sector Assets and Liabilities Management Corporation (PSALM) has engaged multinational consulting firm PricewaterhouseCoopers (PwC) for a third party valuation that will serve as a “pricing anchor” for the privatization of the 165-megawatt Casecnan multi-purpose hydropower facility.

“The national government has instructed PSALM to start the preparation for the privatization of CMPP (Casecnan multi-purpose project),” the power firm noted. The divestment process is expected to take off next year.

“PSALM has contracted through a competitive bidding, PwC-Philippines, to work on third party valuation of the CMPP, which will become the basis for the minimum bid price when the plant is privatized,” the asset-seller firm said.

As emphasized by PSALM President and CEO Irene Besido-Garcia, “we will pursue a sound privatization structure that will ensure the best return for the government, but never compromising the main goal of ensuring continuous power generation and irrigation of the farmlands.”

Apart from the power plant component of the facility, the Casecnan asset also has integrated irrigation infrastructure that has been providing the irrigation needs of 35,000 hectares of agricultural lands in several provinces of Central Luzon, including its host community in Nueva Ecija.

Following the lapse of its 20-year build-operate-transfer (BOT) contract, the 165-megawatt Casecnan multi-purpose facility has been turned over to the government on Dec. 10 this year — and it has been placed under the co-ownership of PSALM and the National Irrigation Administration (NIA).

The CMPP will initially be operated by South Korean firm Soosan ENS Co. Ltd., the third party operation and maintenance (O&M) contractor tapped by PSALM so the power plant can seamlessly contribute electricity supply to Luzon grid

Following that one-year O&M-manned operation for the facility, the government is eyeing to divest CMPP so it can raise additional cash that it can use to pay off the remaining power sector liabilities.

At turnover phase, the ownership of PSALM in the CMPP stands at 60-percent; while the balance of 40-percent accounts for the interest held by NIA.

“We will ensure the continuous operations of the Casecnan plant with the main objective of energy generation for the Luzon grid as well as the irrigation of 35,000 hectares of agricultural lands in Nueva Ecija, Pampanga, Bulacan and Tarlac,” Garcia said.

 
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